Just five months after Safaricom announced its plans to adopt a global initiative, Fuliza M-Pesa is now in the works to become the latest service to join in this global agenda. In a recent statement, Safaricom declared that plans are underway to ensure the seamless integration of the overdraft service to other international markets that are currently using the M-Pesa service.

Fuliza M-Pesa, which was officially launched on January 5th, 2019, is a functionality that enables M-Pesa users to borrow short-term, top up amounts when users need to make transactions but lack enough money in their mobile cash wallets. This revelation has come about through a series of collected data that went on to show that a large number of transactions were canceled every day due to insufficient funds.

To activate the service, an M-Pesa user simply has to dial *234# and follow the easy instructions on the guide menu that pops up. The service is currently only available for Lipa na M-Pesa, Send money, Buy goods and Paybill options. The loan amount ranges from Ksh. 1 to Ksh. 70000 and is subject to specific individual limits depending on one’s M-Pesa transactional history. The overdraft has alloted with an interest rate of 0.035% and it usually comes with a maturity period of thirty days.

Although I am freely using the word “loan” to describe it, there is a buzzing street debate as to whether it is indeed a loan product or a different thing altogether. The originators of the idea claim that it is not a loan for the sole purpose that for loans, the borrower and the lender have agreed upon terms as to the periodic payment of the loan but in Fuliza, the full borrowed amount is deducted in a lump sum every time the borrower makes a deposit without any prior arrangement with the lender as to how the borrowed amount would be paid. Aspects like the lack of a proper installment plan sort of disqualify it from being a loan.

Safaricom partnered with the Commercial Bank of Africa (CBA) and the Kenya Commercial Bank group (KCB) to facilitate the realization of this smart innovation. In its first month, Safaricom customers borrowed Sh. 6.2 billion equivalent to an average daily lending of up to Sh. 200 Million which, the finance heads would agree with me, is a near perfect return on investment even without a mention of the initial investment cost Safaricom had to incur in setting up the service (it is much more likely to be way under 6.2 billion a month).

In a statement made by the Chief Financial Services Officer, Mr. Lopokoiyit, he said that M-Pesa is looking to introduce the Fuliza functionality into the six other African countries in which it is currently operational in i.e. Tanzania, Lesotho, Ghana, the Democratic Republic of Congo (DRC) and Mozambique and there are future plans to introduce the same service to India where Safaricom operates through its parent company, Vodafone.

He further went on to claim that this is in accordance with the idea to export creative persons, ideas, concepts and innovations that have been produced in Kenya to other markets. This is a very special case because it is a few of its kind to ever fully achieve measurable success beyond the bounds of Kenya, leveraging the enigmatic but highly effective concept of ‘Thinking locally and acting globally’ with the likes of Julius Yego (Mr. Youtube), Lupita Nyongo (the actress), the globally  infamous “Maasai Shuka” and the world renown “Hakuna Matata” phrase being just a few honorable mentions.

With a growing population of 21 Million users in Kenya, M-Pesa has managed to grab an estimated 42.3% of the general Kenyan population which, in competitive market standards, is a very healthy chunk to have considerable influence over. Analysts say that the ingenious intuitive aggressiveness of Safaricom for realizing a green and hopeful market opportunity through the rapid success of instant digital credit lending companies, such as Tala and Branch in the digital credit lending has prompted the creation of Fuliza that works in the same format, only this time, it deducts from your Mpesa every time you make a deposit.

This is a clever system because M-Pesa is widely accessible and its usability has been deemed somewhat of a staple in the day-to-day digital transactioning of most Kenyans greatly downsizing the chances of default. I would liken it to taking a small loan from a close workmate who you meet on a daily basis. It is also a great asset for Mpesa as it offers it a proper grip on its users thus giving it a competitive edge over other up-and-rising mobile money services such as Telkom Kash and Airtel Money. Besides M-Pesa transactions, Fuliza can also make deductions in the Central Bank of Africa (CBA) accounts.

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