By Patricia Okumu
The leading telecommunication giant company in East Africa, Safaricom, in conjunction with NCBA and KCB Bank Kenya have announced a redesign of the well-liked Fuliza overdraft facility.
Effective as of 1st October, the rates will apply to Fuliza clients who will now have access to the overdraft facility for free for the first three days on transactions of KSh. 1,000 or less. Customers that refund within three days are exempt from the Fuliza Daily Maintenance Fee. Customers that pay back their debts after three days can additionally receive a daily maintenance fee discount of up to 50 percent.
“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 Safaricom’s Chief Executive Officer, Peter Ndegwa.
Fuliza is a continuous overdraft service that allows Safaricom’s M-PESA customers to complete their M-PESA transactions even when they do not have sufficient funds in their M-PESA account. Introduced in January 2019, it was particularly helpful when the COVID epidemic was at its worst as many customers and companies shifted to cashless transactions
The government’s attempts to assist Kenyans who are negatively classified in credit reference bureaus will also be supported, according to a statement from Safaricom and its partners. In order to do this, Safaricom and NCBA will implement a credit restoration system in which clients who have missed payments on M-Shwari and Fuliza will sign up for a credit rehabilitation program. Over four million digital loan defaulters who are adversely listed on CRBs will be delisted as a result of this, enabling them to once again receive 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 behavior and increases the cost of credit. This is what we intend to address with this announcement.” said John Gachora, Group Managing Director,NCBA.
This partnership is also to collaborate with other industry players to rethink the credit information-sharing system that powers CRB in order to make it easier for Kenyans, particularly Kenyan entrepreneurs, to get credit. By November 1st, 2022, the particular methods for this for M-Shwari and Fuliza clients will be published.
