Commencing 1st of October, all customers will enjoy Fuliza free of the daily maintenance fee for transactions below Ksh 1000 and if repaid within 3 days. Additionally, the daily maintenance fee has been reduced by upto 40%.
In a meeting held at the Norfolk hotel on the 28th of September, the telecommunication giant announced new tariffs on its overdraft facility, Fuliza. In attendance at the press briefing was Peter Ndegwa (CEO Safaricom), Michael Joseph (former CEO M-Pesa), Paul Russo (KCB Bank CEO) & John Gachora (NCBA Bank CEO). President William Ruto also attended the highly publicised event.
In 2019, Safaricom partnered with KCB and NCBA Banks to launch Fuliza. Fuliza is an overdraft facility that allows consumers to access an unsecured line of credit by overdrawing on M-PESA to cover short-term cash flow shortfalls subject to applicable predetermined limits. Customers can also access Fuliza for airtime to complete airtime top-ups incase of shortfalls in their M-PESA wallet.
The overdraft service has grown to be not only profitable but also popular and largely dependable. Kenyans borrowed an average of Sh1.6 billion daily from Fuliza, in the six months leading to June this year. The amount of cash disbursed on Fuliza was up from Ksh 220.38 Billion to Ksh 290 billion over the six months in the same period last year.
Previously, Fuliza charged an interest rate of Ksh 1.083% and a daily administrative fee depending on the amount one borrowed in addition to the normal M-Pesa transactions. Some individuals repeatedly called for the regulation of this overdraft service by the CBK on grounds that its interest rates were exorbitant.
In the press briefing held by key stakeholders of the Fuliza service, the old tariffs were cut by a whopping 40%. Fuliza loans of Ksh 500-1000 will be charged Ksh 6 daily interest fee down from ksh10. Loans between Ksh 101-499 will be charged a daily interest fee of Ksh3 down from Ksh5, previously. Loans ranging between Ksh 1001-1500 will attract a daily interest charge of Ksh18 down from Ksh20. Loans between Ksh 1500-2500 will be charged a daily interest fee of Ksh20 down from Ksh25. Borrowers of Ksh 2500-70000 will get a 16.7% discount to pay ksh 25 daily interest fee down from Ksh30. Fuliza will also be free for transactions under Ksh 1000 and if repaid within three days.
Customers who already hold a Fuliza loan by the start of the new charges will continue paying their loan using the old tariffs. Once the debt has fully been settled, the consumer will now be subjected to the new tariffs. Safaricom said the move comes after an assessment of the prevailing economic climate and customer behavior.