Kenyans borrowed nearly one billion shillings every day on Safaricom’s overdraft platform Fuliza, the latest financial records from the telco giant show.
Safaricom disbursed KES351 billion through overdraft Fuliza in the year ended March, representing a 44 per cent surge compared to KES245 billion wired in a similar period last year.
In the period under review, Safaricom’s daily active Fuliza subscribers grew by 100 per cent to 1.4 million from 700,000 in March 2020, Safaricom’s financial statement for the year shows.
In partnership with NCBA and KCB Bank, Safaricom runs Fuliza, a financial services product that enables customers to access unsecured line of credit by overdrawing on M-PESA to cover short-term cash-flow shortfalls subject to an applicable pre-determined limit.
In the financial year ended March, Safaricom saw increased activity in the M-PESA ecosystem as customers took advantage of waiver on fees on transfers between people, Lipa na M-PESA dealings below KES1,000 and M-PESA wallet – Bank and Bank – M-PESA wallet cash transfers rolled out to cushion customers from adverse economic effects of the pandemic.
Loans advanced through KCB M-PESA, however, decreased by 56.2 per cent to KES51.1 billion from KES116.6 billion recorded in March 2020 as the number of active subscribers dipped by 32 per cent to 3.3 million.
Equally on the decline was the value of loans advanced through M-Shwari which contracted by 27.1 per cent to 94.5 billion from 129.6 billion in the previous reporting period.
Safaricom’s financial disclosures show that on average customers borrowed KES8,700 via KCB M-PESA, KES5,500 on M-Shwari while borrowers received about KES450 through Fuliza.
Safaricom has reported a 6.8 per cent decrease in net profit to KES68.7 billion in the trading period ended March from KES73.7 billion realized in the previous financial year.
The firm attributed the drop in earnings to uncertainty during the pandemic that reduced economic activity especially at the on-set of Covid-19.
Total M-PESA transaction value grew 58.2 per cent to KES22.04 trillion while the volume of M-PESA transactions went up 29.8 per cent to 11.68 billion in the year under review.
M-PESA revenue went down 2.1 per cent to KES82.6 billion from KES 84.4 mainly due to the zero rating of transactions below KES1,000.
However, active users surged by 13.6 per cent to 28.31 million from 24.91 million making M-PESA Safaricom’s largest contributor of revenue.