Kenya’s Safaricom Cuts Daily Interest Rates by 40% on Fuliza and M-PESA Mobile Micro Loans

Kenya’s leading mobile operator, Safaricom, has announced the reduction of interest rates on loans below Ksh 1,000 ($8) from October 2022.

The reduction applies to the telecom operator’s micro-loan facility, Fuliza, which it offers in partnership with local banks, NCBA and Kenya Commercial Bank (KCB).

Since its launch in 2019, Fuliza has become the leading digital lending product in Kenya. The service sent an average of $13.32 million per day in the first half of 2022.

According to Safaricom, interest rates for customers borrowing less than KES 1,000 have been cut by 40%.

Borrowers will now pay KES 6 ($0.05), up from KES 10 ($0.08) for KES 1,000 ($8) or less
Borrowers will now pay KES 3, down from KES 5 for less than KES 500 ($4)

Fees on loans above KES 1,000 will also see some reduction:

Loan amounts from KES 1,001 – KES 5,000 will now attract KES 18 in fees, down 10% from KES 20
Loans of KES 2,500 to KES 5,000 will also attract charges of KES 20 down from KES 25
KES 500 – KES 70,000 loan tape will now cost KES 25 per day, a reduction of KES 5 from the previous KES 30

NB: The new rates will not apply to borrowers currently in debt, and they will have to repay their Fuliza before they can obtain new loans under the new regime.

The 3 companies supplying Fuliza will continue to charge a 1% access fee and have indicated that they will take additional steps to make credit cheaper for Kenyans. The CEOs of Safaricom, NCBA and KCB spoke at a meeting also attended by Chairman William Ruto who called for a cut in the price of credit.

Several players in the Kenyan financial sector were also in attendance, including the Governor of the Central Bank of Kenya, Patrick Njoroge.