Kenyans are set to enjoy cheaper daily Fuliza costs even as President William Ruto On Wednesady told the Central Bank of Kenya (CBK) to fast-track removal of about four million individuals negatively listed on Credit Reference Bureaus (CRBs) over loan defaults.
The telco has lowered the daily fee for Fuliza loans of between Sh100 and Sh500 to Sh3 down from Sh5 and Sh6 from Sh10 on loans between Sh500 and Sh1,000.
It has also lowered the daily charges on loans of between Sh1,000 and Sh1,500 to Sh18 from Sh20, those between Sh1,500 and Sh2,500 to Sh20 from Sh25 and those between Sh2,500 and Sh70,000 to Sh25 from Sh30.
Dr Ruto attended a press conference held by Safaricom, NCBA and KCB to announce the new charges on the overdraft facility that has 28 million subscribers.
Safaricom owns a 40 per cent stake in Fuliza, while NCBA and KCB own 40 per cent and 20 per cent stakes in the product respectively.
Fuliza generated revenues amounting to Sh5.94 billion in the financial year to March underlining its popularity that saw it net 1 million new users in the period.
Kenyans borrowed Sh502.6 billion in those 12 months underpinning their increasing dependence on borrowing from the facility to meet urgent needs amid a high cost of living.
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“All customers will enjoy Fuliza free of the daily maintenance fees for transactions below Sh1,000 for the first three days. This affects 80 per cent of the current Fuliza transactions,” said Safaricom CEO Peter Ndegwa.
“The lower Fuliza tariffs will see millions of Kenyans and businesses will benefit from affordable access to credit enabling them to do more with M-Pesa,” said Mr Ndegwa.
President Ruto said the cheaper Fuliza costs will, among other interventions through production subsidies and accelerated rollout of low-cost housing programme, be key to lowering the cost of living.
This as he announced that up to five millions Kenyans who have been negatively listed on CRBs for defaulting on their loans will be removed from the negative listing by November 1.
Mercy of shylocks
Dr Ruto said millions of borrowers have been left at the mercy of shylocks due to being locked out of credit access by formal lenders which has led to exploitation of borrowers by lenders.
“I am very happy that between four and five million Kenyans will by beginning of November be out of the blacklisting (by CRBs). That is very important because these Kenyans have been excluded from any formal borrowing because of the blacklisting,” said Dr Ruto.
The Head of State has promised reforms in credit listing to ensure borrowers are listed based on their borrowing and repayment habits without necessarily being totally locked out from accessing loans for defaults.
“We don’t want credit listing to be an all or nothing, in or out engagement, we want it to be a facility that gives everybody a chance to be their best in their own time. We should have a credit scoring mechanism so that borrowers are graduated from the least to the best and everyone can have a chance to walk their way up,” said Dr Ruto.