Safaricom has partnered with KCB Bank Kenya to roll out Fuliza ya Biashara, a service allowing business owners to access unsecured credit by overdrawing through their M-Pesa business tills to cover short-term cashflow shortfalls.
Businesses can now tap up to Kshs 400,000 Fuliza overdraft service. This is a notable change to Fuliza facility previously restricted to individuals seeking to complete payments when they have insufficient funds in their M-Pesa wallets.
Safaricom announced the service would advance an overdraft of between Kshs 1,000 to Kshs 400,000, with an interest-free period of two days. Traders will be allowed to draw multiple overdrafts for as long as it is within their limits.
The service attracts a two percent daily access fee for up to 29 days and a daily maintenance fee between Kshs 12 and Kshs 250, depending on the amount loaned.
Fuliza for business will see Safaricom tap into over 538,000 enterprises currently using its payment service, Lipa na M-Pesa, as it sees an opportunity to offer the overdraft facility for working capital needs such as boosting stock and paying rent and utilities.
“With more than 538,000 businesses accepting payments through the service, our strategy is to now go beyond collecting payments by providing business owners with tools to manage and grow their businesses,” said Peter Ndegwa, CEO at Safaricom.
The business overdraft will apply when making transactions from a Lipa na M-Pesa business till to other till numbers and pay bill numbers. It will also be used when sending money to an individual or withdrawing to the nominated number or at an agent.
The overdraft limit will be reset every time a repayment is made, enabling business owners to access new overdrafts, including the amount they just repaid immediately. The limits will be raised or lowered based on transaction history and repayment.
The telco says deductions towards repaying the overdraft will be made automatically from collections made to the till every 30 minutes. Defaulters risk being listed on the credit reference bureau (CRB).
