Kenyans Turn to Fuliza the Savior for Credit as M-Shwari Loans Decrease

New data from Safaricom, Kenya’s largest telco, shows that Kenyans are increasingly relying on Fuliza, a credit overdraft facility, for their financial needs. In the financial year ending 2023, KES 502.6 billion was disbursed via Fuliza, a year-on-year growth rate of 39.6%. This represents a significant increase in the number of times Safaricom clients are using the credit facility, with 1,456,000 transactions made in FY2023.

In contrast, M-Shwari, a loan facility offered to M-Pesa clients who qualify, has witnessed a drop since FY2020. In FY23, M-Shwari loans worth KES 91.5 billion were issued, down from KES 129.6 billion in FY20. However, the number of active M-Shwari users and amount of deposits has been growing.

Experts believe that the shift from M-Shwari to Fuliza could be an indication that Kenyans are facing financial difficulties. Fuliza is easier to access than M-Shwari, as it does not require borrowers to qualify for a loan. However, Fuliza also has higher interest rates and charges, making it a more expensive form of credit.

The data also shows that M-PESA Global, a service that allows Kenyans to send and receive money from abroad, is in high demand. In FY2023, there were diaspora remittances through M-PESA Global of KES 418 billion, up from KES 158 billion in FY20.

Overall, the data suggests that M-Pesa remains the mobile platform of choice for many Kenyans. It currently has 32.1 million active users and generated revenue of KES 117.2 billion for Safaricom in FY2023. However, the shift from M-Shwari to Fuliza and the increase in diaspora remittances could be a sign that Kenyans are facing financial challenges.

The shift from M-Shwari to Fuliza could be a sign that Kenyans are struggling to make ends meet. Fuliza is a more expensive form of credit than M-Shwari, which means that Kenyans are paying more for the money they borrow. This could have a negative impact on their household budgets and make it more difficult for them to save money.

The increase in diaspora remittances could also be a sign of financial hardship. Kenyans living abroad may be sending more money home to help their families and friends who are struggling financially.

If you are using Fuliza to meet your financial needs, it is important to be aware of the high interest rates and charges. You should try to repay your Fuliza balance as quickly as possible to avoid paying more in interest.

There are also a number of other things you can do to improve your financial situation, such as Creating a budget and tracking your spending, Setting financial goals and working towards them, Saving money regularly and Reducing your debt.

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