Kenyans deposited less money in their M-Shwari savings accounts and borrowed more from the Fuliza overdraft service in the year ending March 2023, according to Safaricom’s latest sustainability report.
The report showed that deposits in M-Shwari, a mobile lending platform offered by Safaricom in partnership with Commercial Bank of Africa, dropped by 44.1% to KES 416.7 billion, down from kes 745 billion in the previous year.
This was the first decline since the platform was launched in November 2013.
The report also showed that loans disbursed through M-Shwari increased by 6.3% to KES 91.5 billion, up from KES 86.1 billion in the previous year.
Meanwhile, loans disbursed through Fuliza, an overdraft service that allows users to complete transactions when they have insufficient funds in their M-Pesa mobile wallets, rose by 39.6% to KES 701.5 billion, up from KES 502.6 billion in the previous year.
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The trend points to liquidity challenges that have resulted in over-reliance on credit facilities to deal with economic hardships caused by the COVID-19 pandemic. The pandemic has had a significant impact on Kenya’s economy, with many businesses shutting down and leading to job losses and reduced disposable income for many Kenyans.
M-Shwari offers savers an additional feature called M-Shwari lock savings account that allows users to save for between one and 12 months, earning interest at the rate of up to 6% per year. M-Shwari loans are priced at 9%, which includes loan fees of 7.5% and excise duty of 1.5%. The loans are disbursed instantly to customers’ M-Pesa accounts once an application is made.
Fuliza is an overdraft service that allows users to borrow money instantly through their mobile phones without having to go through lengthy application processes or collateral requirements. This ease of access has made it popular among Kenyans who need quick cash for emergencies or other needs.
Safaricom is Kenya’s largest mobile network operator and the provider of M-Pesa, a mobile money service that has over 30 million active users in the country.
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