Safaricom’s Fuliza has cut daily charges for loans below Sh1000 by 40 percent and introduced a three-day grace period.
Daily charges on loans of up to Sh1000 will come down from Sh10 to Sh6 but the company has retained the 1 per cent access fee on all borrowings.
The telco and its partner banks KCB and NCBA are set to announce the price cuts which will see reducing loans below Sh500 attract Sh3 daily charges down from Sh5. The upper band of between Sh2500 to Sh70,000 have been handed a 16.7 percent price cut from Sh30 daily to Sh25.
Fuliza overdraft facility was launched on January 5, 2019, in partnership with Commercial Bank of Africa (now merged into NCBA) and KCB Group.
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The small credit facility has emerged as a leading mobile loan, disbursing Sh1.5 billion daily. Borrowings from Safaricom’s overdraft service rose by 30.7 percent in the six months to June this year to Sh288 billion up from Sh220.38 billion in the same period last year.
The product may however be facing potential competition from a new zero-interest credit service dubbed Faraja. The new product that would allow millions of its customers to shop for goods up to Sh100,000 and pay later will be offered by Safaricom, EDOMx-a Kenya-based financial technology firm and Equity Bank.
SORCE: Business daily
