The Central Bank of Kenya (CBK) has finally cleared a Safaricom-backed zero-interest credit service for the purchase of goods for up to Sh100,000, providing consumers with a new channel to buy goods and services.
Initially, the CBK had blocked the product due to regulatory hitches.
EDOMx Ltd, a Kenya-based fintech firm behind the service known as Faraja, was to be first cleared as a digital credit provider before rolling it out with Safaricom and Equity Bank.
Now with the CBK nod, consumers can sample yet another credit service. Faraja is set to disrupt the mobile loans market with products such as Safaricom’s interest-attracting Fuliza.
Having a variety of credit facilities not only offers consumer choice, but they also get to improve their lives by acquiring items they would otherwise not have been able to afford.
Faraja, just like Fuliza, will be to Kenya what credit cards have to advanced economies. Its usage will boost consumption which will result in new employment opportunities.
Cashless transactions also decrease the cash in circulation and ensure economic activities are registered, a boon to the State’s tax revenue and the war on illicit money.