Starting November 14, 2021, Safaricom will have the right to use funds held in M-Shwari and KCB M-Pesa accounts to offset Fuliza loans
The banks reserve the right to not give any notice prior to withholding or recovering the outstanding loans
Kenyans borrowed KSh 220.38 billion in the first six months of 2021, up from KSh 176 billion in a similar period in 2020
Safaricom can now hold onto a subscriber’s M-Shwari and KCB M-Pesa accounts as collateral and security for any outstanding Fuliza loans . Kenyans borrowed KSh 220.38 billion in the first six months of 2021. Photo: Getty Images. Source: Getty Images This is part of the firm’s updated terms and conditions for the overdraft service, giving it the right to use the funds held in these accounts to offset Fuliza loans.
The move, which will come into effect on November 14, 2021, is expected to cut the rate of loan defaults on the overdraft facility.
The new terms also apply to mobile saving accounts Safaricom holds with services providers.
At the same time, the new terms also introduce a 1.083% interest rate on Fuliza, whereas previously, the service charged a facility fee of the same amount, according to The Standard. “You hereby agree and confirm that NCBA and KCB are entitled in its discretion to prevent or restrict you from withdrawing in whole or in part the funds in your accounts,” part of the requirements read. The service is underwritten by NCBA Group and the Kenya Commercial Bank (KCB) Group.
The banks also reserve the right to not give any notice prior to withholding or recovering the outstanding loans.
Dennis Mbuvi, a communication officer at Safaricom said the new terms clarify the fact that Fuliza may be offered across additional M-Pesa products. “As a financial service, Fuliza is offered by KCB and NCBA as licensed by the Central Bank of Kenya (CBK) hence the lien clause which is standard for banking products and also there in the current terms,” he said. Fuliza’s popularity
The new terms and conditions are being implemented at a time when the popularity of the service is continuing to grow.
As was reported by TUKO.co.ke on August 31, Kenyans borrowed KSh 1.2 billion daily on Fuliza , in the six months ending in June 2021.Overall, Kenyans borrowed KSh 220.38 billion in the first six months of 2021, up from KSh 176 billion in a similar […]