This archive report was first published on 5 November 2019.
On November 5, 2019, Safaricom announced plans to reduce charges on its mobile loan products, including M-Shwari and Fuliza, in a bid to make life easier for its customers.
This move comes at a time when there is a frenzy to borrow from mobile platforms, many of which are unregulated. The President had recently removed the three-year-old capping of bank borrowing interest, which has led to a surge in mobile lending.
The charges on these mobile loan products are prohibitively expensive. For instance, a Sh1,000 Fuliza loan on an annualised rate comes to 372 percent, which is almost 29 times more expensive than the 13 percent on the capped borrowing.
By reducing these charges, Safaricom is setting a positive tone for the industry. This move is likely to encourage other smaller players to follow suit, thereby easing the pressure on borrowers who do not take commercial bank loans.
While Safaricom has not indicated when the cuts will come, we urge them to do it as fast as possible to alleviate the financial burden on their customers.
