Safaricom has launched M-Pesa based Faraja loans that are interest-free. These loans will allow subscribers to purchase items from Sh. 20 to a maximum of Sh. 100,000 and pay later.
The service will be supported by Equity Bank, and will be available at selected merchants such as Naivas, Good Life Pharmacy and Citi Walk.
A look at how the new M-Pesa zero interest loans will work shows that you will be required to dial Dial *799#, and select OPT in. Once they opt in, customers will be able to perform unlimited transactions up to your credit limit.
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To make repayments, you will need to dial *799#. Your transactions will be displayed, you can pay for only one transaction at a time. Choose the one you want to pay for, press send.
You will be required to enter your M-Pesa PIN as the money is being paid from the M-Pesa wallet, press send, a screen will appear for you to accept or decline. Once accepted, a notification will be sent confirming the transaction details, amount paid and new credit balance. The same can be done on the app.
For a 30-day loan cycle, the loan is due on the 30th day and likewise, the 7-day loan is due on the 7th day after the loan is given.
By dialing *799#, you will access options that will include, Buy Goods, Pay Bill, Pay Back, Buy Airtime, Pay for Services, My Rewards, My Account, and Opt In as a FARAJA Merchant.
How to use the M-Pesa zero interest loans service:
- If you are a subscriber, you can opt in to the service by dialing *799# and selecting ‘OPT in’
- You will then be prompted to enter your M-Pesa PIN after which Safaricom will send your Faraja credit Limit.
- To use the service at the merchants’, dial *799# and select the ‘Buy Goods’ or ‘Paybill’ option.
- Enter the amount and your M-Pesa PIN to initiate a transaction.
- Safaricom will send a notification on the success/failure of the transaction.