Safaricom’s sister firm Vodacom has introduced an M-Pesa overdraft service to Tanzania as part of expansion of the Fuliza service to markets outside Kenya.
Dubbed ‘Songesha’, the service will allow Vodacom customers to complete their M-Pesa transactions when they have insufficient funds in their mobile money accounts, similar to Fuliza in Kenya.
“The overdraft attracts an interest of one percent per day with a facility term of up to 18 days and users can make one request at a time, as long as it is within their overdraw limit, which will be dependent on their M-Pesa transaction score.
“We have partnered with TPB bank to make overdraft possible. In order to determine your overdraft limit, the bank will use algorithms based on M-Pesa transactions,” said Vodacom Tanzania Director of M-Commerce, Epimack Mbeteni.
The service was launched in Kenya in January and went on to rack up 4.2 million users within a month, underlining the high demand for instant loans in the economy.
Its growing success led Safaricom to announce plans to introduce Fuliza to six other countries outside Kenya including Tanzania, Lesotho, Ghana, DR Congo and Mozambique.
The service is usually in partnership with a local bank, which provides M-Pesa users with top-up loans whenever they need to make a transaction, but find they lack enough money in their mobile cash wallets.
M-Pesa subscribers in Vodacom’s Tanzania, the DRC, Mozambique and Lesotho markets expanded by 227,000 customers in three months to hit 13.4 million users at the end of December last year, according to Vodacom. The growth of M-Pesa also helped push up Vodacom’s service revenues of operations outside South Africa and Kenya by 13.2 percent.
Safaricom says the creation of Fuliza was informed by data which indicated that millions of transactions were cancelled every day due to insufficient funds.