Mobile money users across Kenya borrowed $10.9 million every day from January to June 2021 on Fuliza, a mobile overdraft service made available on MPESA, the leading mobile money service in East Africa.
Here is a breakdown of the stats as September 2021:
- Over the 6-month period, the amount of cash disbursed on Fuliza hit $2 billion – An increase of 25% from $1.6 billion during the same period in 2020
- Kenyans borrowed $10.9 million daily in 2021 – In 2020, the rate was $8.87 million during the same period
- The service is underwritten by 2 banks – NCBA Group and KCB Group – launched in 2019
An overdraft is an extension of credit from a lending institution that is granted when an account reaches zero. The overdraft allows the account holder to continue withdrawing money even when the account has no funds in it or has insufficient funds to cover the amount of the withdrawal.
Fuliza is described as the world’s first overdraft service on a mobile money wallet. The service allows customers of Safaricom’s mobile money service, MPESA, to complete their transactions when they have insufficient funds in their M-PESA account.
In addition to the pandemic, the country’s suspension of credit reference bureau listings by mobile money lenders in 2020 has driven more people to use Fuliza, a loan product.
According to a local daily, as a result of the credit listing suspension from April to September 2020, banks, including NCBA and KCB, decreased digital lending with a 50% reduction in loans disbursed over mobile phones.
The overdraft service has been used by Kenyans to cushion against rising expenses in food, energy and other sectors.
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