The merger between Safaricom, NCBA bank, and KCB bank is aimed at increasing the customers’ potential to receive loans of money, save as well as pay back at lower interest.
Cost of credits increase is a major concern as the creditors are currently owing high interests due to long durations covered before repayment since the Fuliza program by Safaricom was based on 3-4 days durations for the cover-up.
According to Mr. John Gashora NCBA Bank CEO, more than 70% of Kenyans have a great credit history and they are therefore enabled to attain huge loans for their use.
Through the reduction of Fuliza tariffs, the blaclisted person with a negative history is sought for help, encouraged, and empowered them.
Mr. Paul Russo Group Chief Executive Officer of KCB Bank said that the collaboration of the bankers and telco is a great venture to come up with more ways and products of empowering the citizens.
“It’s difficult to see the parties come together, and in this collaboration only challenge faced is creating meaningful livelihoods for the people. We need to collectively come together and give accessible and affordable credit to address this challenge. Fuliza delivers on the individuals’ part but there is a need to solve the MSME and Saccos too,” said Russo
KCB has demonstrated a lending capability of up to 2.1 trillion as there has been a growth of the mobile lending values to 91 billion in the first part of the year hence a more prospect future.
CEO Safaricom Peter Ndegwa said that at the launch of Mpesa, revealed there were only 600,000 loan accounts at the launch of M-Pesa with a soar in growth to over 20 million loan accounts from services like M-KCB, Fuliza, and Mshwari.
This has seen a growth in the impact of credit access as various citizens and entrepreneurs have benefitted from this loaning program.
The access to smartphones has also grown lately with over 600, 000 Kenyans getting smartphones through the lipa mdogo mdogo program by paying a deposit of 500sh and installments of 20sh daily.
Fuliza empowers a customer to finish the transaction despite having less cash by hundreds which would mean the inability to complete the transaction without the fuliza option.
For transactions below a thousand, the customer won’t pay the daily maintenance as the three-day free of interest is aimed at assisting customers to use fuliza at lower costs in a move to increase the users of this program.
Fuliza users are going to see the reduction of 50 % of fuliza tariffs, especially in these times of economic challenges it is to benefit users.
“Customers will be availed of various services including a boost in their financial health. Affordable access to credit is essential as it assists the citizens to cope with challenges at hand,” said Peter Ndegwa.
According to Peter Njoroge, CEO of Central Bank of Kenya, after the launch of the fuliza program in five months it was evident that the fuliza program had been used by more than 5 million Kenyans hence proving to be critical.
“Given the three-year review of the product, CBK is detailing the importance of the Fuliza to the Citizens as the appetite for credit is high but what’s alarming to the Kenyans is the cost of these loans,” said Njoroge.
Risk-based credit pricing is underway which will seek to provide an answer and better option to the costs that Kenyans are surcharged in the lending and paying back processes.
