Many mobile users believe that disposing of a SIM card is a quick fix for an outstanding M-Shwari debt. However, M-Shwari operates as a formal banking product through NCBA and Safaricom, meaning its recovery processes are anchored in your legal identity rather than your mobile digits.
Here is everything you need to know about how M-Shwari tracks, manages, and recovers loans.
1. Loans are tied to your identity, not your SIM
In the world of digital banking, your National ID is the ultimate source of truth. When you register for M-Shwari, the loan agreement is legally bound to your ID number.
- Persistent Debt: Because the debt is managed at the ID level, discarding a phone number does not “delete” the loan.
- The New Line Connection: If you default on a loan and later register a new Safaricom line using the same ID, the bank’s system will automatically link the new number to your existing debt profile.
2. How funds are recovered
Under the terms and conditions of M-Shwari, the bank exercises the Right of Lien. This is a legal provision that allows a financial institution to recover owed funds from any other accounts held by the same individual.
If you have a balance in your M-PESA or a different M-Shwari sub-account under the same ID, the bank may automatically deduct the outstanding loan amount to settle the arrears.
3. The myth of the recycled number
A common concern for new subscribers is inheriting the “bad luck” of a previous owner. If you purchase a recycled SIM card that was formerly used by a defaulter, you can rest easy.
Since your National ID is different from the previous owner’s, their financial history has no impact on your creditworthiness. You will be able to open your own M-Shwari account based on your own ID’s credit history.
4. CRB listings follow the person
Credit Reference Bureau (CRB) reporting is strictly ID-based. If a loan remains unpaid, the negative listing is attached to your National ID. This means that even if you switch networks or use multiple SIM cards, your ability to access credit from other banks, SACCOs, or digital lenders will remain restricted until the primary debt is settled.
Protect your identity
To maintain your financial health, it is vital to know exactly which mobile lines are linked to your ID. Fraudsters often use stolen ID details to register lines and take out ghost loans.
Pro Tip: Dial *106# regularly. This USSD code allows you to view all mobile numbers registered under your ID. If you spot a number you don’t recognize, report it to a Safaricom shop immediately to prevent unauthorized debt from being attached to your name.