Thread by @mmnjug

.@SafaricomPLC plans to take #Fuliza to businesses and is awaiting approval before rolling out #FulizaforBusiness in what will be an improvement on the current product, which is only open to individual subscribers registered as M-Pesa users. - @StandardKenya

#Fuliza and overdraft facility allows customers to access unsecured credit by overdrawing on M-Pesa to cover short-term cash flow shortfalls, subject to predetermined limits.

M-Pesa Africa Managing Director @Sitoyo Lopokoiyit said in a recent call with investors and financial analysts that #FulizaforBusiness is among the products @SafaricomPLC is seeking regulatory nod for, including a phone-based wealth management product named #Mali.

#FulizaforBusiness will see @SafaricomPLC tap into over 400,000 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.

.@SafaricomPLC did not disclose which regulator it is seeking approval from but last year, the company said it had reached out to @CMAKenya @ira_kenya @CBKKenya for clearance of unit trust, insurance and savings products.

#FulizaforBusiness is likely to support transactions such as Lipa na M-Pesa, buy goods and send money, meaning that businesses with liquidity strain will be able to tap into the product to keep going.

The product looks set to rival products offered by digital lenders and banks to micro, small and medium-sized enterprises, many of which survive on short-term loans.

Lipa na M-Pesa gained traction last year at the peak of Covid-19 as a waiver on charges and a switch to digital transactions rose as people avoided handling cash for fear of contracting the virus.

The service enables merchants to accept cashless payments for goods and services, while Safaricom earns commission from the transacted values.

.@SafaricomPLC sees the increased usage of digital payments by businesses as an opportunity to target them through new products such as Fuliza.

It is not clear if @SafaricomPLC will price the product the same way as Fuliza for individuals, where the fee starts from Sh2.40 per day for a Sh100 overdraft and goes up to Sh36 per day for borrowing above Sh2,500.

The planned launch of #FulizaforBusiness follows the telco reporting that users had borrowed Sh242.6B in the six months to September, up from Sh149.4B in a similar period last year.

#Fuliza has become popular among Kenyans seeking to meet essential or emergency needs such as shopping, rent and supporting friends and family when there is no sufficient money in their M-Pesa wallet.

#FulizaforBusiness may also lift its profile from just a product that allows borrowing for consumption to one that provides credit for investment.

Small businesses have generally struggled to access credit due to high default rates, but the current model of #Fuliza will shield @SafaricomPLC from defaults since the debt is settled instantly when the customer’s wallet receives money.

#Fuliza is offered in partnership with @KCBGroup and @NCBABankKenya and has a repayment rate of 99% —meaning only Sh1 out of Sh100 overdraft falls into default.

.@SafaricomPLC is now planning to expand its overdraft facility #Fuliza to businesses and is awaiting approvals from relevant regulators bit.ly/2ZcqVBh via @StandardKenya

#FulizaforBusiness