Safaricom subscribers more than doubled borrowings from the overdraft service Fuliza in the six months to June, as the Covid-19 lockdown led to layoffs and pay cuts, Business Daily reported. During the half year, Fuliza loans rose to KES 176 billion from KES 81 billion in the same period a year earlier, indicating daily borrowing of KES 967 million. The jump in the uptake happened as the economy shed 2.23 million jobs amid sluggish corporate earnings in the wake of Covid-19.
Fuliza is an M-Pesa-based overdraft platform that allows subscribers to access limited cash if their mobile wallets have no funds. Fuliza allows customers to complete M-Pesa transactions when they have insufficient funds. The service is underwritten by KCB Group and NCBA Group, which already had partnerships with Safaricom to offer short-term loans on the M-Pesa platform. NCBA has said it lent KES 132 billion through Fuliza in the six months to June while KCB Group disclosed loans worth KES 44 billion on the overdraft feature.
The debt is recovered from M-Pesa balances automatically, but subscribers who do not settle their overdrafts within 30 days are barred from using their unused credit limit until they pay the outstanding amount.
