Kenyans borrowed an average of Sh1.6 billion daily from Safaricom’s overdraft service, Fuliza, in the six months to June this year, showing increased dependence on the service that offers short-term loans amid reduced income as the high cost of living bites.
The amount of cash disbursed on Fuliza hit Sh290 billion over the six months, up from Sh220.38billion disbursed in the same period last year.
The overdraft service introduced in 2019 and underwritten by NCBA Group and KCB Group allows customers to meet essential needs such as shopping, renting, or paying for goods and services on the mobile money service, M-Pesa.
Fuliza has an interest rate of Sh. 1.083 per cent and charges a daily administrative fee depending on the amount one borrows in addition to the normal M-Pesa transactions.
The overdraft has turned out to become the major moneymaker for NCBA, accounting for 85.54 per cent of the group’s digital disbursements during the review period.
“Obviously given where the macros are we have continued to support our customers through this product,” stated the NBA Group Chief Financial Officer David Abwoga.
M-shwari, on the other hand, accounted for about Sh20 billion of the total digital disbursement by the lender. Overall, NCBA Group disbursed Sh339billion in digital loans in the period marking a 25 per cent increase year on year.
Abwoga noted that the increased digital disbursements have contributed to a slight drop in the bank’s impairment charges during the half-year period.
The impairment charged during H1 2022 went down by 6 per cent year-over-year to Sh. 5.6 billion.