Safaricom, NCBA and KCB Bank Kenya have announced a restructuring of the Fuliza overdraft facility in a move that will see customers transacting on Fuliza access the overdraft facility at a free daily maintenance fee for the first three days for transactions below Kshs 1,000. The move benefits more than 80% of M-Pesa customers who seek to complete their payment transactions with Fuliza credit.
Customers that borrow above Kshs 1,000 will also enjoy 10 – 20% discount on their Daily Maintenance Fee. The one-off Access fee, levied when customers access Fuliza remains unchanged at 1%, meaning that Fuliza still retains its position as the most accessible and affordable credit facility in the country.
The new discounted rates will be effective on October 1, 2022.
“In line with our purpose of transforming lives and in the spirit of Tuinuane, we have introduced a free daily maintenance fee period for Fuliza transactions of Kshs 1,000 that repay within the first three days. This simple change will reset the use of the Fuliza service to its intended purpose,” said Peter Ndegwa, CEO, Safaricom.
Additionally, Safaricom and its partners have announced their commitment to support government efforts relating to Kenyans who are negatively listed by Credit Reference Bureaus (CRBs). To this end, Safaricom and NCBA will execute a credit repair mechanism that will see customers who have defaulted on M-Shwari and Fuliza enlist for a credit repair scheme. The move is aimed to lead to the delisting of over 4 million digital loan defaulters who are negatively listed on CRBs and restore their ability to access formal, regulated credit.
“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 MPESA 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 enterprenuer, to access credit more seamlessly. The specific mechanisms for this for M-Shwari and Fuliza customers shall be announced by 1st November, 2022,” said, John Gachora, Group MD, NCBA.
Fuliza is an M-PESA innovation and is the first solution in the world to enable mobile money customers to complete a transaction when they have insufficient funds. Launched in January 2019, Fuliza was especially instrumental at the height of the COVID pandemic as many customers and businesses switched to cashless transactions.
“We are taking additional deliberate steps to provide affordable credit to Kenyans in our contribution to drive up economic activity and recovery. We will anchor this on strong partnerships with various stakeholders while deploying innovative digital capabilities to enhance financial access and inclusion,” said Paul Russo, CEO, KCB Group.
M-PESA is the world’s leading mobile money solution and Africa’s largest Fintech empowering over 30 million customers in Kenya access a variety of previously unavailable financial services. Consequently, M-PESA has driven financial inclusion in Kenya to more than 84% of the adult population from a low of 25% when it was launched in 2007, placing Kenya third in formal financial inclusion in the continent in the Global Findex indicators. M-PESA also generated over Kshs 107.6 billion ($920 million) in revenue as at FY22.
NCBA Group is a full-service banking group providing a broad range of financial products and services to corporate, institutional, SME, and consumer banking customers. NCBA Group operates a network of more than 100 branches in 5 countries including Kenya, Uganda, Tanzania, Rwanda, and the Ivory Coast. Serving over 60 million customers, the NCBA Group is the largest banking group in Africa by customer numbers. NCBA Bank Kenya is Kenya’s third-largest bank by assets. The Bank is a market leader in Corporate Banking, Asset Finance, and Digital Banking.
KCB Bank Kenya is the largest commercial bank in the country. A subsidiary of KCB Group, the Bank has the largest branch network, with over 200 branches, 367 ATMs, and 16,000 agents offering banking services on a 24/7 basis in East Africa. This is complemented by mobile banking and internet banking services with 24-hour contact center services for customers to get in touch with the Bank. KCB Group, which also has a presence in Uganda, Tanzania, South Sudan, Burundi, Rwanda, and a representative office in Ethiopia, also boasts of a wide network of correspondent relationships totaling over 200 banks across the globe, allowing customers to have seamless
facilitation of their international trade requirements wherever they are.