Safaricom has announced that M-pesa Fuliza Overdraft Facility will go global. It seeks to expand to seven more African countries.
The company seeks to tap into micro-loans sector that has seen demand rise in the last few years. Fuliza launched in Kenya on January 5th through a partnership of Safaricom, KCB Group and the Commercial Bank of Africa. Today, it very popular with M-Pesa users in Kenya.
Already M-Pesa has gone global with the services being offered in some other African countries besides Kenya where it begun. Based on the success of M-Pesa abroad, Fuliza will be introduced in countries namely Tanzania, Ghana, The Democratic Republic of Congo (DRC), Lesotho, and Mozambique.
These countries are already using M-Pesa services through Safaricom’s parent company Vodacom. For this reason, its penetration is expected to be easy.
How Fuliza works
Fuliza is an overdraft facility that allows users to top-up loans whenever they want to make transactions. In Kenya, borrowers can take up to Ksh.70000.00 (US$ 700) which they can use to pay bills or buy goods.
The Credit facility attracts 1.08% of the value of the money borrowed daily, which translates to over 395% per annum.
Unlike other loans, you have 30 days to pay and you can longer use the service after the 30 days if you default.
Speaking Safaricom Chief Finance officer Sitoyo Lopokoiyit said, ‘there are seven African counties that run M-Pesa and we will be looking into taking Fuliza into those markets first.’
He added that, ‘there are over 60 organizations offering credit in Kenya and if you look at the way Fuliza has been designed as an overdraft, the fee is actually small when you look at how people quickly pay.’
He further noted that, ‘It is not a loan. We are listening to our customers and we think it is priced right.’
Safaricom notes that it created Fuliza from the knowledge that millions of transactions were cancelled daily due to insufficient funds.