Kenyans Borrowing 1.37 Billion Shillings On Fuliza Daily

By Lynnet Okumu / Published May 13, 2022 | 10:55 am

KEY POINTS

Customers on the Fuliza service grew by 16.4 percent year over year to 6.9 million borrowers from a previous 5.9 million borrowers on the platform in March 2021.

KEY TAKEAWAYS

Fuliza, which is now Safaricom’s most lucrative loan product, has earned the telco 5.94 billion shillings in revenue up from 4.54 billion shillings, representing a 31 percent growth.

Borrowings under Fuliza in the period between March 2021 and March 2022 hit a total of 1.37 billion shillings daily.

Financial pressures have pushed one million more Kenyans to rely on fuliza loans, pushing the overall amount disbursed by the overdraft facility in the last 12 months to 502.6 billion shillings, down from 351.2 billion shillings recorded in 2021.

The 43.1 percent increase comes in the backdrop of tough economic times and many households have been forced to cut back on their daily expenditure.

Customers on the Fuliza service grew by 16.4 percent year over year to 6.9 million borrowers from a previous 5.9 million borrowers on the platform in March 2021.

Fuliza, which is now Safaricom’s most lucrative loan product, has earned the telco 5.94 billion shillings in revenue up from 4.54 billion shillings, representing a 31 percent growth.

The product according to Safaricom, recorded the best loan repayment rate of 101.5 percent as compared to other products such as Mshwari and KCB Mpesa whose repayment rates fell to 63.2 percent and 97 percent respectively

In contrast, KCB M-Pesa and M-Shwari registered a fall in loans disbursed in the same period with the value of loans taken on the platform standing at 9.4 percent and 8.9 percent respectively.

The average single loan amount disbursed through Fuliza was reduced by 22.6 percent to 345.2 shillings from 446.2 shillings. This indicates that a majority of the customers are largely from the low-income bracket that is increasingly using the facility to quickly settle low-value transactions.

Fuliza, a partnership between Safaricom, KCB, and NCBA is an overdraft facility allowing its customers to complete M-Pesa transactions despite insufficient funds in M-Pesa accounts

The platform charges a one percent access fee and a maintenance fee on the outstanding balance which ranges from 6 shillings and 36 shillings a day depending on the value of the overdraft taken.

Safaricom yesterday announced a 1.7 percent profit drop of 67.49 billion shillings for the financial year ended March 2022, majorly attributed to costs relating to the ongoing establishment of its Ethiopia unit that is in its first year of operation.