This archive report was first published on 26 August 2019.
Safaricom's Fuliza Overdraft Service Sees Sh81 Billion in Borrowings ¶
Published on August 26, 2019, Safaricom's Fuliza overdraft service has seen Sh81 billion borrowed by users in the first six months of its operation.
The service, launched in January this year, offers users an overdraft to complete transactions if they run out of funds in their M-Pesa accounts. During the first month after launch, the telco advanced Sh6 billion.
Analysts at Standard Investment Bank (SIB) say the amount is based on results published by the telco's partner banks. The Fuliza overdraft facility is a partnership involving Safaricom, Commercial Bank of Africa (CBA) and KCB Group.
With the revenue share split between Safaricom, CBA and KCB Group set at 40 per cent, 40 per cent and 20 per cent respectively, the three entities could have earned as much as Sh2.4 billion over the six months.
According to SIB, Safaricom could have more than doubled the revenue earned quarter on quarter to Sh668m, using the revenue sharing formula as a guide.
Like its other mobile lending products like M-Shwari and KCB M-Pesa, Fuliza is run in partnership with the two banks using algorithms from M-Pesa's transactional data to determine loan limits for users.
Analysts have in the past said Fuliza could in the medium to long-term present competition to traditional payment methods like credit and debit cards.
