M-PAWA OR M-PATWA (CAPTURED)?

According to Vodacom website on M-Pawa, this is a banking service offered to M-Pesa registered customers through their mobile phones in partnership with CBA. Customers can save and borrow money while earning interest on money saved. Daily news of 11th June 2014 reports,over 250,000 had so far registered for M-Pawa and has raked in 1.2 billion in three weeks after it was launched. That money is savings from 50,000 people who had registered.

This service marks the latest innovative saving product offered in 2014 in the Tanzania banking industry and supplements greatly mobile money services offered by Vodacom Limited known as M-Pesa since through it, you can have M-PAWA. This article examines this new service in the light of either mobile money customer's are powered or captured (patwa)from Islamic perspective.

SAVING AT M-PESA VERSUS SAVING AT M-PAWA.

Currently, customers who keep their money on their M-pesa are not earning any return or interest, however saving from M-PESA to M-Pawa provides you a room to earn interest from 1% up to 5% depending on the amount you save. This is the selling point for this product besides removal of charges such as ledger fees among others and hence it is put categorically clear that'you will be paid interest on your savings balance (Interest will be calculated daily but paid out after 3 months).'

M-PAWA HAS MICRO-LOAN WITH FACILITATION FEE.

Besides interest paid on saving, this service has another selling point which is access to micro-loan from TZS 1,000 to TZS 500,000 subject to fulfillment of eligibility criterias and upon your choice. Is this loan charged interest? They answer as "There is no interest charged. There is only facilitation fee of 9% of the loan amount requested charged only once for each loan taken in 30 days.If you have requested a loan of Tsh. 100,000, you will pay back Tsh. 109,000 within 30 days." If you pay early same amount will apply however if you delay to pay in 30 days, you pay extra as they say "Repayment period will be extended for an additional 30 days at a roll over fee of additional 9%. Roll over can only be done once."

SHARIA PERSPECTIVE ON SAVING AND BORROWING.

Islam abhors transaction which involves Interest. In the holy Qur'an, Almighty states " O you who believe! Eat not Riba (interest or usury) doubled and multiplied, but fear Allah that you may be successful. And fear the Fire, which is prepared for the unbelievers." (3: 130-131). The prophetic hadith peace be upon him said "any loan that renders benefit (to creditor), that benefit is Riba (Interest).

On saving, it is very clear that putting your money at M-Pawa weather you want interest or not is to get yourself involved in interest since whoever participate in M-PAWA agree to that feature of receiving interest.

On borrowing, they say 9% is not interest it is facilitation fee, this may confuse those who have not studied Sharia i.e fiqh muamalat and may not know the difference between facilitation fee and interest. From the hadith above, interest is any benefit that the lender gets directly linked with the loan. This is to say, despite calling it facilitation fee the truth of the matter it is interest since in Islam a loan is not returned with any pre-determined extra amount. It isnot facilitation fee either since it is revolving, if you delay to pay the same amount the 9% applies for the next period until repayed.

Islam requires her followers to lend or borrow free of any return tangible or intangible since this is an act of worship rewarded by the almighty ten fold the reward of charity (sadaqa). The rationale is to support one another as brothers and to curb the rich from exploiting the poor or needy using the wealth granted by the will of Allah. The way you are allowed to make money in Islam is clear; do honest trade, do a permissiblework, participate in joint venture, lease useful property with intrinsic value among others but dont treat money as a commodity to resale or buy at a certain price like rice or wheat. Because money doesnt have intrinsic value while rice and wheat has.

Finally, from the above discussion it appears that the service has great potential to move the unbanked as well as those who save through M-Pesa to have M-Pawa Saving Account not because of interest on saving but because of the perceived opportunity to borrow. However, from Islamic perspective, this service operate with fundamental prohibited element of interest on both sides ( saving and borrowing) in which Muslims and other are not supposed to participate. Hence, the decision rests with the customer-to be powered on the earth or captured to hellfire in the hereafter or as Jesus on matthew 16:26 asked "For what will it profit a man if he gains the whole world and forfeits his soul?"