Boostika: Equity now launches its version of Fuliza

Equity Bank Kenya Limited has rolled out an unsecured facility that allows customers to overdraw their accounts by up to Sh100,000 to complete transactions such as shopping, taking competition to the doorsteps of Safaricom’s Fuliza.

The lender has communicated to customers the new product dubbed Boostika which will allow clients with insufficient funds when making a payment, sending money or buying airtime, to complete such transactions and pay the amount within a month at an effective cost of credit of 8.5 per cent.

Terms and conditions of the product show customers with accounts that have been active for at least six months will be eligible to access overdrafts of between Sh100 and Sh100,000 based on their loan limit. They are allowed to draw multiple overdrafts for as long as the unpaid balance is within their limits.

“The Boostika option is embedded on the transaction journey when one runs low on funds when making a payment, sending money or buying airtime, therefore offering one the convenience of completing a transaction seamlessly without exiting the payment journey,” says Equity.

A breakdown of charges shows Equity will charge a five per cent of the amount as processing fee (also called loan application and credit evaluation fee), interest of 1.5 per cent per month, one percent as loan insurance and an excise duty of 20 per cent of the processing fee.

This means a customer tapping the maximum allowed of Sh100,000 will pay 8.5 per cent interest or Sh8,500 made up of Sh5,000 processing fees, Sh1,500 interest, Sh1,000 loan insurance charge and another Sh1,000 towards excise duty.

A Sh70,000 Boostika overdraft will cost an Equity customer Sh5,950 if it is repaid after 30 days.