Safaricom will from next week introduce an overdraft facility for M-Pesa customers after M-Pesa and data services pushed up its half-year net profit by 20.22 per cent to Sh31.5 billion.
The overdraft service known as Fuliza that was piloted in October, will enable customers to send money or pay for goods and services when they have insufficient balance in M-Pesa wallets.
The telco is betting on the facility, a loan version of Okoa Jahazi for airtime and data bundle to sustain its business volumes amid fears that steep increases in taxes could slow its growth momentum in the second half of the year.
The Nairobi Securities Exchange-listed firm on Friday reported that it earned Sh35.52 billion from globally-acclaimed M-Pesa in the six months to September, an 18.2 per cent jump from Sh30.05 billion a year earlier.
Growth in data services slowed in the period, expanding by 10.8 per cent to Sh19.45 billion while voice revenues were nearly flat, increasing 1.4 per cent year-on-year to Sh48.03 billion.
The overdraft facility being rolled out in partnership with KCB and Commercial Bank of Africa (CBA), will attract a daily charge of 0.5 per cent of the borrowing as a top-up to enable M-Pesa clients complete transactions.
KCB and CBA, which have leveraged on M-Pesa platform to offer instant mobile loans (MShwari and KCB M-Pesa respectively), will use algorithms based on transactions such as M-Pesa deals and airtime use to set a limit on amount which can be accessed by individual customers.
Chief executive Bob Collymore said the overdraft limit could be as much as Sh50,000, depending on the value of transactions.
“For example, if you want to buy goods worth Sh5,000 but you only have Sh4,500, you can borrow the bit that you don’t have (Sh500) within the limit that you have, just like an ordinary overdraft. You keep doing this again and again until you hit your limit, so it’s not that you borrow with us again,” Mr Collymore said in an interview.
“We don’t have final, final approval [from central bank] yet but we expect by middle of next week, we will have it. It’s a bit of a milestone for the three of us (Safaricom, KCB and CBA) and the pilot has shown that customers really like it.”
The overdraft facility is the latest of a raft of innovations that leverage on M-Pesa to generate additional revenue for Safaricom.
The prices for airtime, data bundles and money transfer services, Safaricom’s main revenue streams, have gone up after government increased taxes by almost one half in September.