Fuliza reduces daily fees by 50 percent and cuts interest charges

A smile and relief will be on Fuliza borrowers from October 1, as the daily maintenance fees will not be charged for transactions below KSh 1,000 in the first three days of borrowing. The Fuliza charges per day have been revised.

In addition to this, the overdraft service, offered by Safaricom reduces Fuliza daily charges by 50 percent.

This is following a review of Fuliza charges by Safaricom, NCBA, and KCB. This is with the aim of a commitment by these companies to provide Kenyans with sustainable and affordable credit.

In a meeting held at Norfolk hotel in Nairobi, where representatives of the government, Safaricom, KCB, and NCBA, it was announced that the leading telco in Kenya has announced a reduction of 50% in interest for Transactions below Ksh 1,000.

“In total, these changes will cumulatively lead to a 50% overall reduction in Fuliza tariffs across the board,” Peter Ndegwa, the Chief Executive Officer of Safaricom spoke in a meeting held on Wednesday, 28th of September.

However, no changes were made to the Fuliza access fee which will remain at 1% even for transactions that are below Ksh 1,000.

“We will maintain the Fuliza access fee at the current 1% across all transactions, including those of 1000 Kshs and below,” the Safaricom CEO Ndegwa said in his announcement at Norfolk hotel in Nairobi.

Safaricom customers who use Fuliza will also enjoy a reduced daily maintenance fees for transactions between Ksh 1000 and Ksh 70,000.

The Safaricom CEO noted that this makes Fuliza the most accessible and affordable credit facility offering, coming in at 1 percent of the transaction Value.

Fuliza is an M-Pesa service that was launched by Safaricom in 2019. this was in partnership with NCBA group and Kenya Commercial Bank (KCB).

The main aim of Fuliza was to have a mobile credit facility that empowered customers to complete transactions in case they have insufficient funds in their M-Pesa wallet. In short, it helps customers overdraw on their M-PESA account, acting as a short-term overdraft facility.

It was highlighted by CEO of NCBA, John Gachora that on reviewing borrowing data, it showed that the original intention of Fuliza, which is to be a short-term facility, wasn’t being met. Instead, m-pesa accounts/wallets were still overdrawn after 14 to 19 days.

Fuliza said in their statement, “We have continued to assess the evolution of consumer behaviour and economic conditions to identify ways in which we can further enhance the utility of our digital financial services.”

Fuliza changes to fees and interest rates charged

One of the main changes in the new Fuliza rates is that borrowers between Ksh 101 to Ksh 500 will be charged a daily fee of Ksh 3. The previous amount was Ksh 5.

Also, overdraft borrowers of between Ksh 501 to Ksh 1,000 will attract a daily fee of Ksh 6, reduced from Ksh 10. Not only that, Fuliza overdrafts of less than Ksh 1,000 will have a 3-day waiver on daily fees. This means that no daily fees will be charged if you repay the amount within 3 days.

Another thing to note is that Fuliza borrowers of between Ksh 1,001 – Ksh 1,500 will be charged 50% less on daily charges. Meaning the daily charge has been reduced from Ksh 20 to Ksh 10.

The 50% Fuliza cut on daily fees applies to amounts between Ksh 1,501 – Ksh 2,500 where borrowers will now pay Ksh 12.5 instead of Ksh 25. For people borrowing between Ksh 2,501 to Ksh 70, 000, the daily fee will be 15 bob instead of the previous Ksh 30.

Kenyans borrowed Ksh 578 billion in 2021 as overdrafts through the Fuliza service. This translated to approximately Ksh 1.58 billion borrowed daily through the service.