Safaricom, the largest telecoms company in Kenya, has partnered with KCB Bank Kenya to launch a new overdraft service for businesses called Fuliza ya Biashara. The service allows business owners to access unsecured credit through their M-Pesa business tills, helping them to cover short-term cashflow shortfalls. The overdraft ranges from KES1,000 to KES400,000, with an interest-free period of two days. The service will attract a two percent daily access fee for up to 29 days and a daily maintenance fee between KES12 and KES250, depending on the amount tapped.
Safaricom’s move into the business overdraft market is aimed at boosting its existing Lipa na M-Pesa service, which currently has over 538,000 businesses using its payment service. By offering the new overdraft facility, Safaricom hopes to provide business owners with the tools they need to manage and grow their businesses. The overdraft can be used for a variety of working capital needs, including boosting stock and paying rent and utilities.
To qualify for the facility, a business owner must opt into the M-Pesa business till and have been active on the service for over six months. The overdraft limit will reset every time a repayment is made, enabling business owners to access new overdrafts, including the amount they just repaid immediately. The limits will be raised or lowered based on transaction history and repayment.
Repayments towards the overdraft will be made automatically from collections made to the till every 30 minutes. However, defaulters risk being listed on the credit reference bureau after 91 days of their due date. Despite this, Safaricom is hoping to replicate the success of its individual overdraft service, Fuliza, which was averaging KES1.38 billion in daily disbursements in the financial year ended March 2022, earning the company KES5.94 billion.