Safaricom, NCBA, and KCB restructure Fuliza – all you need to know

Safaricom, NCBA, and KCB Bank Kenya on Wednesday announced a restructure of the popular Fuliza overdraft facility, which will allow clients transacting on Fuliza to access the overdraft facility for free for the first three days for transactions of KSh. 1,000 and below. More than 80% of M-Pesa clients who choose to pay using Fuliza credit will profit from the change.

Customers who borrow more than KES 1,000 will additionally receive a 10 – 20% reduction in their Daily Maintenance Fee.

The one-time access fee levied when consumers access Fuliza stays fixed at 1%, establishing Fuliza as the country’s most accessible and affordable credit facility.

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 KSh. 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.

Furthermore, Safaricom and its partners have stated their intention to support the government in its efforts to assist Kenyans who are negatively listed in Credit Reference Bureaus. To that aim, Safaricom and NCBA will implement a credit repair system in which clients who have defaulted on M-Shwari and Fuliza would be enrolled in a credit rehabilitation scheme. Over four million digital loan defaulters who are negatively listed on CRBs will be delisted, restoring their ability to seek 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 M-pesa 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 specificmechanisms for this for M-Shwari and Fuliza customers shall be announced by 1st November, 2022.” said John Gachora, Group Managing Director, NCBA.

“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, allowing more than 30 million Kenyans to access previously unavailable financial services.

As a result, M-PESA has increased financial inclusion in Kenya to more than 84% of the adult population, up from 25% when it was launched in 2007, placing Kenya third on the continent in terms of formal financial inclusion, according to the Global Findex metrics.