Safaricom’s overdraft facility Fuliza has been restructured to be in tune with the times: times are tough, inflation is high, the cost of living is high and everyone is looking for a reprieve of any sort. Oh, and we have a new
sheriff government in town. A government that rode to power on the promise of making life a little easier for the common man. For the “hustlers”.
In the nearly 4 years that it has existed, Fuliza has grown from being what we called the “Okoa Jahazi of M-Pesa” at launch to a key cog of the country’s economic wheel.
For context, in the first half of this year alone, Fuliza borrowings were up by over 30% compared to a similar period in 2021.
In plain numbers, Kshs 288 billion was advanced to Fuliza users between January and June 2022, compared to Kshs 220 billion last year. In 2020, that figure stood at Kshs 176 billion. So, we are looking at over Kshs 1.5 billion shillings being disbursed via Fuliza on a daily basis – and that number, if the trend from the last 3 years is anything to go by, can only go up.
With partners NCBA (Bank) and KCB (Bank), Safaricom’s Fuliza will now not attract any maintenance fees for the first 3 days for transactions of Kshs 1,000 and below. According to Safaricom, this move affects more than 80% of its M-Pesa users who also use the overdraft facility.
However, the one-off 1% “access fee” levied by Safaricom and its partners when users access Fuliza, remains in effect.
The move is seen both as a response to consumer trends as well as an incentivization tool for users to repay the amounts owed to them faster. M-Shwari, Safaricom’s other facility that allows users to both save and borrow, has a similar incentivization structure.
“This restructure aims to reinforce the original purpose of Fuliza – a short-term overdraft facility for 4 to 7 days. From the data that we have, it is clear that the original intent for Fuliza to be a short-term credit facility has evolved. Since the COVID-19 pandemic, many customer M-Pesa wallets are now remaining overdrawn for 14-19 days. This was not the intention of Fuliza as it embeds the wrong customer behaviour and increases the cost of credit. This is what we intend to address with this announcement. Additionally, we wish to express our intention to work with our partners and other industry stakeholders to rethink the credit information-sharing framework that underpins CRB to better enable Kenyans, especially the Kenyan entrepreneur to access credit more seamlessly,” NCBA Group Managing Director John Gachora is quoted saying in a statement from the three partners.
Here are the rest of the details concerning the new rates:
|Tariff Band||Old Daily Maintenance Fee (in Kshs)||New Daily Maintenance Fee (in Kshs)|
|101-500||5.00||Free for first 3 days; 2.50 after|
|501-1,000||10.00||Free for first 3 days; 5.00 after|
|1,001 - 1,500||15.00||18.00|
|1,501 - 2,500||20.00||20.00|
|2,501 - 70,000||30.00||25.00|