SUSTAINABILITY

Fuliza processed 300 loans per second in 2021

The overdraft facility allows customers to complete M-Pesa transactions when they have insufficient funds

In Summary
  • The telco in its latest sustainability report revealed that it disbursed Sh351.2 billion for the period through the overdraft service.
  • Overall, transactions stood at 787 million in the period, up from 392million in 2020, topline growth of almost 100 per cent.
Customers queue outside an M-Pesa shop in Nairobi
Customers queue outside an M-Pesa shop in Nairobi
Image: FILE

Every second in 2021, Safaricom processed 300 overdraft requests to bail out its subscribers, according to its Business Sustainability Report released yesterday

The telco reports that it disbursed Sh351.2 billion for the period through its Fuliza service.

This means that every second, it lent Kenyans an average of Sh11,100 through the  the Fuliza service .

Overall, transactions stood at 787 million in the period, up from 392million in 2020, a growth of almost 100 per cent.

In the year, the value of repayment stood at Sh345.7 billion, with the rate of repayment versus disbursal at 98.4 per cent meaning users rarely defaulted their loans on the service.

“The traction that the facility had since its launch has continued through the period with strong growth in both the number of customers and volume of disbursements,” says the firm in its report.

Safaricom's other lending facilities include M-shwari and KCB-Mpesa launched in 2013 and 2015 respectively.

Fuliza was launched in 2019 but its low interest rates seems to have propelled its growth.

The overdraft facility allows customers to complete M-Pesa transactions when they have insufficient funds.

The debt is recovered from M-Pesa balances automatically, but subscribers who do not settle their overdrafts within 30 days are barred from using their unused credit limit until they pay the outstanding amount.

Safaricom charges Fuliza customers a one-off 1.083 per cent interest and a daily administrative fee that depends on the outstanding balance.

The default rate for Fuliza overdraft is usually low since the debt is recovered instantly when the customer’s M-Pesa wallet receives money.

The Fuliza fee starts from Sh2 daily for Sh100 overdraft and goes up to Sh30 per day for Sh2,500 and above.

The increased reliance on the service, saw Fuliza's revenue overtake that of the other two lending facilities in 2021.

In the period, Fuliza earned the telco Sh4.5 billion, M-shwari had revenue worth Sh2.2 billion while KCB-Mpesa's revenues stood at Sh800million.

“We are set to continue providing solutions to society’s most pressing challenges and support other businesses, especially small and medium enterprises to thrive through financial services solutions,” said Peter Ndegwa, CEO, Safaricom.

Meanwhile, the telco in the report says that it created a total value of Sh664 billion for the Kenyan society in its last financial year.

According to the report’s ‘True Earnings’ highlights, the firm contributed Sh557.1 billion to the economy in the 2020/2021 financial year, which is 5.2 per cent of Kenya’s Gross Domestic Product.

The independent analysis of Safaricom’s true value to society identifies the socio-economic and environmental impacts of the company and quantifies them in financial terms.

The report also details how the telco sustained 190,273 direct and indirect jobs during the year and, if the wider effects on the economy are included, this number increases to over 1 million jobs.

Key among the environmental highlights of the report is the introduction of science-based carbon reduction targets which the company says will help them plan their progress towards becoming a net zero carbon emitting company by the year 2050.

Since 2012, Safaricom has been publicising the sustainability business report to measure its contribution to the economy.