A report has revealed that Kenyans used Safaricom’s overdraft service Fuliza daily to a staggering amount over Sh. 1.6 billion. In the first half of 2022, the survey revealed that there was increased dependence on loans by Kenyans.
Kenyans have been struggling with high costs of living and reduced income, and this has seen Safaricom’s Fuliza gain Sh. 290 billion in the past half year. This is an increase from 220.38 billion in 2021.
Fuliza was launched in 2019 by Safaricom and allows one to complete mobile transactions if they lack sufficient amounts in their wallets.
Fuliza charges an interest rate of Sh. 1.083% and a daily administrative fee depending on the amount one borrows in addition to the normal M-Pesa transactions.
In the past 6 months, Fuliza has accounted for NCBA bank’s major profits at 85.54%. NCBA bank issued 339 billion in digital loans. M-Shwari accounted for Sh. 20 billion by Fuliza.
“Obviously given where the macros are, we have continued to support our customers through this product,” said the NCBA CFO, David Abwoga.
However, despite the number of loans and customers increasing daily, a survey conducted by Deloitte and data analysis group DataEQ shows that majority of MPesa users regret signing up for Fuliza.
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This was because their limits were so low and hence they couldn’t have access to more funds, with Safaricom charging high for short-term loans.
Safaricom makes automatic deductions for any money you receive on your Mpesa account if you owe it to their overdraft service. This makes most customers question their trust in the service.
“Despite acknowledging the convenience offered by Mpesa, Kenyan consumers expressed unhappiness around how quickly the fees and related charges add up and developed workarounds.” It stated in part.