Safaricom, M-PESA Managing Director and acting Chief Financial Services Officer Sitoyo Lopokoyit (left) interacts with Everline Moraa an eggs vendor in Kawangware. Safaricom plans to extend its overdraft facility, Fuliza, to businesses in a move that looks set to increase the daily lending for the product beyond the current Sh1.34 billion.
The telco says it has applied to the regulator and is awaiting approval before rolling out Fuliza for business in what will be an improvement on the current product, which is only open to individual subscribers registered as M-Pesa users.
Fuliza allows customers to access unsecured credit by overdrawing on M-Pesa to cover short-term cash flow shortfalls, subject to predetermined limits.
M-Pesa Africa Managing Director Sitoyo Lopokoiyit said in a recent call with investors and financial analysts that Fuliza for business is among the products Safaricom is seeking regulatory nod for, including a phone-based wealth management product named Mali.
Fuliza for business will see Safaricom tap into over 400,000 enterprises currently using its payment service Lipa na M-Pesa as it sees an opportunity to offer the overdraft facility for working capital needs such as boosting stock and paying rent and utilities. READ MORE
“This is part of what we are awaiting regulatory approval for. So it is something that we are really keenly looking at, given we have over 400,000 businesses that use Lipa na M-Pesa,” said Mr Lopokoiyit.
Support transactions
Safaricom did not disclose which regulator it is seeking approval from but last year, the company said it had reached out to the Capital Markets Authority, Insurance Regulatory Authority and Central Bank of Kenya (CBK) for clearance of unit trust, insurance and savings products.
Fuliza for business is likely to support transactions such as Lipa na M-Pesa, buy goods and send money, meaning that businesses with liquidity strain will be able to tap into the product to keep going.
The product looks set to rival products offered by digital lenders and banks to micro, small and medium-sized enterprises, many of which survive on short-term loans. Fuliza for business is likely to support transactions such as Lipa na M-Pesa, buy goods and send money. Lipa na M-Pesa gained traction last year at the peak of Covid-19 as a waiver on charges and a switch to digital transactions rose as people avoided handling cash for fear of contracting the virus.
The service enables merchants to accept cashless payments for goods and services, while Safaricom earns commission […]