Fuliza M-Pesa

Fuliza M-PesaSafaricom announced unaudited financial results for the six months ended September 30, 2019. The numbers were impressive after the carrier made a killing from its mobile money product M-PESA that grew by 18.2 percent to KES 41.97 billion. Other revenue streams generated the operator billions of shillings, but today’s assessment is exploring what M-PESA means for the carrier and users, and if revising fees associated to some of the M-PESA-based products such as Fuliza and M-Shwari would mean to Kenyans.

For context, Michael Joseph who’s steering the operator on an interim basis revealed to Business Daily that Safaricom is exploring channels to cut M-Shwari and Fuliza interest rates. You can find out how much you pay after using the overdraft facility (it is costly and all of us are aware of this already) by reading this.

For housekeeping purposes, M-PESA’s transaction values grew by 23.9 percent in the review period. The volume of transactions and M-PESA agents increased by 11.4% and 8.2%, implying that the 23.6 one-month active M-PESA users rely on the product for their day to day mobile money activities.

Further examination of the financial document reveals that Safaricom made substantial revenues from ‘new business,’ which mostly include savings and lending (that grew 100% YoY!), payments, and international money transfers. Besides new business, transfers and withdraws contributed significantly to the impressive financial performance.

M-PESA performed admirably for the period under review

If you break the avenues of M-PESA revenues, you would realize Safaricom investments in loans (Fuliza and M-Shwari), transfers, and withdraws are the main drivers of growth. However, the telco says it will only revise loan fees downwards, citing a series of issues that have plagued digital lenders – and not transfers and withdrawals.

The space is filled to the brim with tens of apps that offer customer loans at astronomical interest rates. The concern has been raised by the CBK, which does not have a framework to manage online lenders and fintech apps, although a process is underway to regulate the market.

The fallacy

Safaricom is not touching withdrawal, payments, and transfer transaction fees (that are more expensive than the competition) because it wants you to use Fuliza and M-Shwari frequently. Fuliza reportedly disbursed KES 140 billion in its 10-month stint in the market and has been cited as a success by a carrier that is also pushing M-Shwari to foster a ‘savings’ culture.

Nevertheless, if the rates are dropped, then it would be evident that Safaricom is pushing actions that will promote borrowing in a deregulated space, and will likely lead to customer over-indebtedness.

Further, this will likely lead to higher M-Shwari and Fuliza uptake leading to an increased rate of ‘digital mining.’ We have seen digital mining in recent times recent whereby Safaricom, among other large corporations gradually take our money by charging you and I a small commission per transaction. Think of what would happen if you and I started sending KES 1000 back and forth over M-PESA, and after about thirty transactions we would have nothing, and Safaricom would have all the KES 1000 as commission.

I think a move that stands a chance to benefit the customer is one that revises transaction costs for other services besides loan products. Otherwise, it means nothing to people who are already trapped by similar products that exploit Kenyans’ addiction to credit for massive profits.

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Kenn Abuya is a friend of technology, with bias in enterprise and mobile tech. Share your thoughts, tips and hate mail at [email protected]


  1. You are very wrong, reducing interest rate and making sure one only qualifies for a loan depending on their savings not the traditional Safaricom and Mpesa usage. Promoting a savings culture and borrowing based on your savings history.

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