Fuliza Customers have Access to M-Pesa Agents for Cash

The previous mode, where the service was only available for payments, users of Safaricom’s overdraft program Fuliza can now withdraw cash directly from M-Pesa agent businesses.

According to a spot check by the Business Daily, consumers can withdraw money up to their Fuliza limit, less the usual transaction fees, just like they could if they actually had money in their M-Pesa wallets.

For instance, a user with an Sh500 overdraft limit can walk up to an M-Pesa agent without any money in their account and withdraw Sh473 after paying an Sh27 withdrawal fee.

Since its debut in 2019, Fuliza has only let users to send money to other M-Pesa users and make payments using till and pay bill numbers when they do not have enough money in their wallets.

The telco argues that the facility is not a loans scheme and contrasts it with products like KCB M-Pesa and M-Shwari, yet the development transforms the facility to resemble a loans scheme.

It also comes just over a month after the government launched the widely publicized Hustler Fund, a loan facility to support small-scale entrepreneurs, underscoring Safaricom’s intensified efforts to fend off competition in the mobile credit market.

The facility’s user, Christopher Mwangi, a site clerk for real estate developer Mahiga Homes Limited, thinks the move is apt given that banks have recently resumed charging for mobile banking.

Customers will save money when paying for things with bank pay bill numbers, he claimed.

“I think with the re-introduction of transaction charges in mobile banking, it is much better now to operate in cash. Some vendors have even scrapped their bank pay bills so being able to withdraw the Fuliza limit is a timely initiative,” he said.

Since its debut, Fuliza, backed by lenders NCBA Group and KCB Group, has grown in popularity, with loan amounts continuing to rise over time.

When compared to the same period in 2021, when the amount disbursed was Sh220 billion, overdraft borrowings during the first half of last year increased by 30.7 percent to hit Sh288 billion. The sum was Sh176 billion for the first six months of 2020.

The numbers from last year amount to a daily borrowing of Sh1.57 billion, compared to Sh1.2 billion and Sh972.3 million over the same periods in 2021 and 2022, respectively.

Since the country’s economy was severely damaged by the Covid-19 pandemic in 2020, which resulted in significant employment losses that had an impact on household incomes, mobile loans have made progress in the country.

While the pandemic’s severe effects have gradually subsided, the economy and businesses that had begun the rebuilding process have been suffering from high inflation brought on by global shocks like fuel price increases and the Russia-Ukraine war together with a harsh domestic drought.