Safaricom launched M-Shwari a few years ago. The loan product was also fronted as a platform to allow Safaricom customers to save more than access it for short- or long-term loans.
In late 2018, Safaricom revealed that it was bringing an overdraft facility for its millions of M-PESA users. Dubbed Fuliza, the product went live in early 2019 and has since grown to be a go-to ‘loan’ service for a lot of people.
Similar to M-Shwari, NCBA is one of the partners that manage Fuliza.
Business Daily has since reported that customers who use M-Shwari will see some changes.
M-Shwari and Fuliza are going to co-exist in the sense that borrowers will need to request a minimum of KES 2000 to use the former. Any smaller funds will be completed as an overdraft (Fuliza).
This essentially means that the minimum amount for an M-Shwari loan has been raised to KES 2000 from KES 500.
It should also be noted that M-Shwari attracts a smaller facility fee (7.5%), unlike Fuliza that is quite expensive at 1.083% (daily).
For context, a KES 1000 M-Shwari loan only needed KES 56.25 in facility fees over one month. The same amount attracts KES 243.68 in interest from Fuliza. These numbers are high because of the risks associated with online loan products.
Safaricom and NCBA say that this development has been made to stop customers from being listed by the CRB as a result of borrowing small amounts. Fuliza is also essential in this play because any deposit into the M-PESA wallet is used to clear the overdrawn balance. For M-Shwari, you have to explicitly make a payment.