• The Fuliza overdraft facility, which was launched on January 5, is a partnership involving Safaricom, Commercial Bank of Africa (CBA) and KCB Group.
  • Safaricom subscribes borrowed a record Sh6.2 billion ($620 million) in just one month on the Safaricom’s Fuliza overdraft service.
  • The banks provide M-Pesa users with top-up loans whenever they need to make a transaction, but find they lack enough money in their mobile cash wallets.

Kenya’s Safaricom subscribes borrowed a record Sh6.2 billion ($620 million) in just one month on the Safaricom’s Fuliza overdraft service, clearly demonstrating a huge demand for instant, micro-loans in the country.

The Fuliza overdraft facility, which was launched on January 5, is a partnership involving Safaricom, Commercial Bank of Africa (CBA) and KCB Group.

Safaricom Kenya's most profitable company Safaricom Kenya's most profitable company

The banks provide M-Pesa users with top-up loans whenever they need to make a transaction, but find they lack enough money in their mobile cash wallets.

“The number of customers who have opted in (to Fuliza) is 4.2 million and Sh6.2 billion has been disbursed,” said Safaricom chief executive Bob Collymore in a statement.

Safaricom CEO Bob Collymore Safaricom CEO Bob Collymore

The fast-paced growth, if maintained, is set to boost the fees collected by Safaricom and the two partner banks.

The Sh6.2 billion worth of revolving credit disbursed in one month is equivalent to an average daily lending of more than Sh200 million ($2 million).

The amount also rivals the loan books of some of Kenya’s small banks.

The Fuliza loans attract a facility fee of 1.083 percent of the value of the credit.

The Fuliza loans attract a facility fee of 1.083 percent of the value of the credit. The Fuliza loans attract a facility fee of 1.083 percent of the value of the credit.

An additional administrative fee of up to Sh30 is charged for each day that the loan remains unpaid.

The overdraft facility has a term of 30 days beyond which a borrower is deemed to be in default.

Recovery of the loans is enforced through deductions from customers’ balances and inflows into their CBA and M-Pesa accounts.

Fuliza brings the overnight lending concept to the masses, with borrowers’ creditworthiness determined by an analysis of their transactions and borrowing history among other factors.

Borrowers can take loans of up to Sh70,000 ($700).