This archive report was first published on 21 August 2020.
On August 21, 2020, a report by the National Assembly Committee on Labour and Social Services revealed that some young people employed on the government's economic stimulus programme, Kazi Mtaani, could not be paid through their mobile phones due to blocked lines for failure to settle Fuliza overdraft loans.
Others had their wages withheld because they furnished the government with mobile numbers of their relatives, which did not match their personal details, to evade debt payment.
The payment hitch showed the youth's addiction to mobile loans that are easy to access in small amounts but are priced higher compared to credit from banks and saccos.
Most of the young people were hooked to Safaricom's Fuliza credit service, which is linked to mobile money platform M-Pesa and is designed to deduct the outstanding debt automatically within 24 hours.
According to the report, some youth had blocked or frozen numbers due to having taken Fuliza loan from Safaricom, while others used IDs that belonged to other family members, resulting in pay delay.
Fuliza was introduced in January 2019 and is popular among low-income earners who take loans of less than Sh2,000 for their daily needs, with the debt settled after sales are made or wages received.
However, Fuliza charges a facility fee of 1.083 per cent or 395.2 per cent annualised, underlining the high cost of using the short-term credit service regularly.
