Telecommunication company Safaricom has announced 40 per cent discount on Fuliza charges to its customers for loans below Sh1000.
It was also agreed that those with between, Sh2500 to Sh70,000, be handed a 16.7 per cent price cut from Sh30 daily to Sh25.
Peter Ndegwa, Safaricom CEO, announced massive tariff changes to all customers using Fuliza, free of the daily maintenance fee for transactions.
“Beginning October 1, together with our partners NCBA and KCB, all customers will enjoy Fuliza free of the daily maintenance fee and the daily transaction fee of below Sh1,000. The small credit facility has emerged as a leading mobile loan, disbursing over Sh1.5 billion daily,” Ndegwa stated.
According to NCBA Group Managing Director John Gachora, from the data held by the telecommunication companies, it is clear that the original intent of Fuliza, serving over 28 million customers since its inception, to be a short-term credit facility has evolved, noting that it was not the intention of Fuliza as it embeds the wrong credit behaviour.
President William Ruto said over 4 million Kenyans have been blacklisted by Credit Reference Bureaus (CRBs), for defaulting loans but indicated that they will be ejected from the negative listing effective November 1, 2022.
Ruto said lowering the cost of credit is part of multiple interventions to lower cost of living insisting that his government is not against CRB, adding that his adminstration is simply “just changing the model”.
“I have been sent to you (Safaricom, KCB, NCBA) by your customers, they want a win-win outcome out of the relationship you have with them. Instead of blacklisting we can have a graduated listing of borrowers based on how they have borrowed and how they have paid back,” Ruto observed.
The President challenged the TELCOs to think beyond financial inclusion to a more accessible and affordable credit model, stating that borrowing must not only be responsible, but it must also be affordable to spur micro and small enterprises (SMEs), that are struggling due to access to credit.
“This is a positive development for millions of Kenyans who are excluded from accessing credit. We have the largest opportunity in enabling credit access to MSMEs,” claimed Ruto.
Ruto tasked Safaricom, NCBA and KCB to form loan scheme, allowing SMEs to borrow at interest rates below 10 per cent daily, suggesting part of Hustlers Fund to act as security towards the initiative.
The President has directed CBK to develop rules and regulations for betting companies, so as to stop operating in what he termed an opaque nature.
