This archive report was first published on 25 October 2019.
On October 25, 2019, Safaricom interim CEO Michael Joseph expressed disappointment over the direction some of its mobile credit facilities have taken, particularly M-Shwari.
Launched in 2012 in partnership with Commercial Bank of Africa (CBA), M-Shwari was designed to enable customers to save and take microloans through the M-Pesa platform. However, Joseph noted that the product has instead promoted a borrowing culture, with customers borrowing more than they save.
‘We wanted to create a savings culture, not a borrowing culture where you could borrow multiple your savings,’ Joseph said during the marking of Safaricom’s 19th anniversary in Nairobi.
Joseph also highlighted the high repayment costs associated with M-Shwari, with customers being charged a 7.5 per cent fee for each loan. He hinted that the telco might review the product in the next few months.
Despite the negative impact of M-Shwari, Joseph praised the product, saying the team behind it had grown it into ‘something extraordinary.’ He also lauded Fuliza, Safaricom’s latest overdraft facility, as an ‘extremely brilliant product.’
In the first six months of the year, Safaricom customers borrowed Sh81 billion on Fuliza, a partnership involving Safaricom, CBA, and KCB Group.
