This archive report was first published on 23 August 2019.
As of January 2019, Safaricom's mobile overdraft service, Fuliza, has been a game-changer for millions of Kenyans. The service has now reached a significant milestone, with KSh29 billion disbursed since its launch.
According to Safaricom's 2019 Sustainability Report, 10.7 million opt-in customers use the service, out of a total 22.6 million M-Pesa subscribers. This means that out of every two M-Pesa users, there is a high likelihood that one uses Fuliza.
Fuliza is the world's first contextual mobile overdraft facility, allowing M-Pesa customers to complete transactions even when they have insufficient funds in their account.
With Fuliza, customers can use the service to send money, pay bills, and buy goods through the Lipa na M-Pesa option. However, unlike other Safaricom loan services, users cannot withdraw the funds from their account.
The service processes an impressive 12 overdrafts per second, a reflection of Kenyans' borrowing habits. The idea behind Fuliza stemmed from a study that showed that up to 58% of M-Pesa transactions failed due to insufficient funds.
Fuliza charges a 1% access fee and a maintenance charge that varies depending on the amount borrowed. The service automatically deducts the outstanding overdraft from the funds deposited in a customer's M-Pesa account.
