Safaricom taps more revenue on Fuliza after introducing 40% discount for its 6.9 million customers
Safaricom introduced a 40 percent discount on Fuliza loans effective October 1, 2022 as the firm employs new ways to increase its revenue bracket in a competitive credit market.
The discounted rate was arrived at after the telco entered into a deal with the Kenya Commercial Bank (KCB) and NCBA on the back of public outcry over the high cost of credit in the country.
It is a major win for President William Ruto, whose manifesto champions for a reduced cost of borrowing in a cash-strapped economy.
The Memorandum of Understanding (MoU) between the three suggests only Safaricom customers with not more than Ksh.1,000 facility will enjoy the discounted rate.
With a retained access fee of one percent for all facilities, loans of between Ksh.101 to Ksh.500 and Ksh.501 to Ksh.1,000 will now attract a fee of Ksh.3 and Ksh.6 respectively, from the respective prior charges of Ksh.5 and Ksh.10.
Customers with overdrafts ranging from Ksh.1001 to Ksh.1500 will receive a 10 percent discount, while those borrowing between Ksh.1,501 and Ksh.2,500 will enjoy a 20 percent discount.
Borrowers of between Ksh.2,501 to Ksh.70,000 will receive 16.7 percent discount on daily maintenance fees.
The new tariffs, according to the deal, will be for customers who would have cleared their outstanding loan.
The move also comes at a time when Fuliza is facing stiff competition from Faraja, which offers zero-interest credit service for Kenyans who wish to shop for products of up to Ksh.100,000 and pay later.
The M-Pesa overdraft facility was launched in January 5, 2019, through a partnership with the defunct Commercial Bank of Africa (CBA). CBA entered into a merger deal with the National Bank of Kenya (NBK) to form NCBA.
Quick loans from Fuliza surged by 43 percent to Ksh.502.6 billion in 12 months to April 2022 from Ksh.351.2 billion the previous year.
This was supported by 6.9 million Kenyans who enrolled on Fuliza from 5.9 million as of March 2021, a 16.4 percentage point increase.
Loan size on Fuliza was averaged at Ksh.345.20 in the review period, down from Ksh.446.20 previous year.
Fuliza contributed Ksh.5.9 billion in revenues to the telecommunication firm, a 31 percent growth in disbursements from Ksh.4.5 billion in 2020 – outranking both KCB M-Pesa and M-Shwari in terms of quick loans via the M-Pesa platform.