Kenyans turning to mobile loans as they borrow Sh381b through the Safaricom app
Kenyans turning to mobile short-term overdraft facilities as they borrow Sh381b through the Safaricom app.
In order to survive during these difficult economic times, more Kenyans who cannot access regular banks are turning to mobile short-term overdraft facilities.
According to recent data, amid declining income streams and rising living expenses, an estimated 15 million Kenyans borrowed Sh380.7 billion between April and September using the platforms Fuliza, M-Pesa, and Mshwari.
Safaricom has partnered with lenders, NCBA Bank and KCB to operate Fuliza, an overdraft product that enables customers to access to an unsecured line of credit by overdrawing on M-Pesa to cover short-term cash flow shortfalls, subject to predetermined limits.
Additionally, the telecom manages the KCB M-Pesa and Mshwari lending platforms, which let users save as little as Sh1 to be eligible for loans ranging from Sh50 to Sh1 million.
Data from the company’s half-year financials for the period ending September 2023 released last week show an increase in distinct customers and average loan disbursement figures.
Fuliza users jumped by 14.2% from 6.4 million in September 2022 to 7.4 million, borrowing Sh315 billion, up 30.1% from Sh242 billion, while Mshwari customers increased to 4.4 million, with average loans disbursed rising by 20.1% from Sh6,047 to Sh7,260 and totaling Sh43 billion. They also took out KSh21.7 billion loan through KCB M-Pesa.
Peter Ndegwa, chief executive officer of Safaricom, claimed that the three products were responsible for M-growth, PESA’s which resulted in a 32% Year on Year (YoY) increase in the mobile wallet’s half-year transaction value to Sh18.9 trillion and a 32% YoY increase in total transaction volumes to Sh9.06 billion.
“M-Pesa usage continues to grow, driven by our Fintech solutions including payment, lending and savings, and international remittances,” said Ndegwa.
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