Nairobi — Safaricom and KCB Bank Kenya (KCB) have rolled out an overdraft facility that will enable business owners to access goods on credit.
The 'Fuliza ya Biashara' will allow businesses on 'Lipa Na M-PESA' to complete payments even with insufficient funds in their till.
The credit facility will apply when making transactions from a Lipa Na M-PESA Business Till to other Till Numbers and PayBill Numbers, when sending money to an individual, and when withdrawing to the nominated number or at an agent.
The service will advance an overdraft of up to Sh400,000 with a 24-hour interest-free period.
"We launched Lipa Na M-PESA as a way for businesses to conveniently receive cashless payments through their mobile phones, whenever they are," Safaricom CEO Peter Ndegwa said.
"With more than 538,000 businesses accepting payments through the service, our strategy is to now go beyond collecting payments by providing business owners with tools to manage and grow their businesses," Ndegwa added.
"Fuliza ya Biashara caters especially to small businesses by providing them with instant, affordable credit of up to KSh. 400,000, empowering them to rapidly respond to their business needs."
Fuliza ya Biashara will be available through the M-PESA Business App and on the Lipa Na M-PESA Transacting Till.
Business owners can access a minimum overdraft of Sh1,000 and can draw multiple overdrafts of up to Sh400,000 based on their assigned limit.
The overdraft is automatically repaid from incoming till payments, with amounts outstanding beyond 24 hours charged at a 2 percent daily access fee for up to 29 days.
The Fuliza ya Biashara limit is reset every time a repayment is made, enabling business owners to immediately access new overdrafts, including the amount they just repaid.
"This proposition once again signifies the immense opportunities available within the digital ecosystem managed by KCB and Safaricom," KCB Bank Kenya Managing Director Annastacia Kimtai said.
"We believe that the roll-out of this exciting feature will give Kenyan entrepreneurs the headroom to scale up their business operations without getting into the danger of not servicing some of their critical needs like payments to suppliers," she added.
"As a partner, KCB will conveniently provide the much-needed support to guarantee scalability and access across its various customer delivery touchpoints."
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The two firms say the facility seeks to bridge the lack of affordable credit among small and microbusinesses, which are categorized as high-risk by lenders.
The solution provides each business with a tailored overdraft limit based on transaction history on Lipa Na M-PESA and repayment history of previous overdrafts.
Fuliza ya Biashara is M-PESA's first credit solution dedicated to businesses and the latest in a string of innovations targeting business owners on the platform.
In 2020, Safaricom introduced the Lipa Na M-PESA Business Till and M-PESA Business App, enabling businesses to make payments from tills and providing simplified cash flow management through the app.
More than 390,000 businesses have downloaded the M-PESA Business App, with over 50 percent of business transactions on M-PESA being made through the app.
