On average, Ksh962.2 million was disbursed everyday via Fuliza in the full year to 31st March 2022. [PHOTO/ ANDREW KASUKU]
On average, Ksh962.2 million was disbursed everyday via Fuliza in the full year to 31st March 2022. [PHOTO/ ANDREW KASUKU]

Safaricom, the telco behind overdraft service Fuliza offered in partnership with NCBA and KCB banks, on Wednesday, September 28 announced the introduction of a new discounted tariff on the service.

The new tariff seen by Business Today will take effect from Saturday, October 1st. Fuliza has been a golden goose for Safaricom and the banks, with the value of disbursements on Fuliza increasing from Ksh246.6 billion in 2020 to Ksh351.2 billion in 2021.

The new tariff keeps the access fee for all drawdowns unchanged at 1% but slashes daily maintenance fees (DMFs). Daily fees for the tariff bands Ksh101-500 and Ksh501-1000, will both drop by 40% – from Ksh5 to Ksh3 and from Ksh10 to Ksh6 respectively.

Drawing down between Ksh1001-1500 will cost 10% less as the daily fees fell from Ksh20 to Ksh18. Ksh1500-2500 will cost 20% less as the daily maintenance fees reduced to Ksh20 from Ksh25. For Ksh2501-70000, it will cost 16.7% les as the daily fees have been reduced from Ksh30 to Ksh25.

In addition, customers who drawdown Ksh1000 and below shall enjoy a waiver on daily maintenance fees for the first three days.

The new rates will not apply to existing loans. Fuliza users with existing debts will have to pay the current daily maintenance fees on their outstanding balances. The new tariff will take effect once the balance is cleared.

Fuliza has long been criticized over its high interest rates. Central Organization of Trade Unions (COTU) boss Francis Atwoli in 2021 called for government action against Fuliza.

“With most banks having their interest rates between 12% to 14% per annum, most of the digital lending facilities have interest rates of between 70% to 500% per annum. Just to mention a few, Fuliza by Safaricom, which has pushed many Kenyans into owning more than one sim card from the same mobile operator, has an interest rate of 1% per day and more than 360% p.a,” he stated at the time.

The move to cut the rates comes even as the Central Bank of Kenya (CBK) continues to license digital lenders under the new regulatory regime. The new rules gazetted in March 2022 were intended to help end cases of exploitative and unethical practices by digital lenders including mobile-based loan applications.

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