Businesses can now tap up to Sh400,000 Fuliza overdraft service, easing access to the facility previously restricted to individuals seeking to complete payments when they have insufficient funds in their M-Pesa wallets.
Safaricom has partnered with KCB Bank Kenya to roll out Fuliza ya Biashara, a service allowing business owners to access unsecured credit by overdrawing through their M-Pesa business tills to cover short-term cashflow shortfalls.
The telco said the service would advance an overdraft of between Sh1,000 to Sh400,000, with an interest-free period of two days. Traders will be allowed to draw multiple overdrafts for as long as it is within their limits.
The service attracts a two percent daily access fee for up to 29 days and a daily maintenance fee between Sh12 and Sh250, depending on the amount tapped.
Fuliza for business will see Safaricom tap into over 538,000 enterprises currently using its payment service, Lipa na M-Pesa, as it sees an opportunity to offer the overdraft facility for working capital needs such as boosting stock and paying rent and utilities.
“With more than 538,000 businesses accepting payments through the service, our strategy is to now go beyond collecting payments by providing business owners with tools to manage and grow their businesses,” said Peter Ndegwa, CEO at Safaricom.
The business overdraft will apply when making transactions from a Lipa na M-Pesa business till to other till numbers and pay bill numbers. It will also be used when sending money to an individual or withdrawing to the nominated number or at an agent.
A business owner will qualify for the facility after opting into the M-Pesa business till and must have been active on the till service for over six months.
The overdraft limit will be reset every time a repayment is made, enabling business owners to access new overdrafts, including the amount they just repaid immediately. The limits will be raised or lowered based on transaction history and repayment.
“We believe that the roll-out of this exciting feature will give Kenyan entrepreneurs the headroom to scale up their business operations without getting into the danger of not servicing some of their critical needs like payments to suppliers,” said Annastacia Kimtai, managing director at KCB Bank Kenya.
Safaricom says deductions towards repaying the overdraft will be made automatically from collections made to the till every 30 minutes. Defaulters risk being listed on the credit reference bureau (CRB).
“A business owner that does not pay their Fuliza ya Biashara on time will not be able to access the overdraft service, their limit will be reduced, and eventually they will be listed on CRB after 91 days of their due date,” reads the terms and conditions of the product.
Safaricom will be hoping to replicate the success of Fuliza for individuals, which was averaging Sh1.38 billion daily disbursements in the financial year ended March 2022, earning the telco Sh5.94 billion.