Safaricom announces 50 per cent reduction in Fuliza interest charges

NCBA Chief Executive Officer John Gachora on Wednesday said a review of the borrowing data showed that the original intention of Fuliza was not being achieved.

"During the Covid-19 pandemic, we saw a surge in the number of customers accessing credit. We began observing the numbers... From the data, it is clear the original intent for Fuliza to be a short-term facility for four to seven days has evolved. Many customers' M-pesa wallets are now remaining overdrawn for 14 to 19 days on average," said Gachora.

This, he added, was promoting the wrong credit behaviour.

"We are announcing changes to the Fuliza proposition with the goal of amending it back to its original purpose. With the right use of Fuliza, customers will see a benefit in the cost of credit and borrowing experience."

According to data, Kenyans borrowed Sh578 billion in 2021 amid rising inflation and economic hardships.

The overdrafts, utilised between January and December 2021, translated to Sh1.58 billion daily borrowing, pointing to the increasing use of the service rolled out in 2019.