Safaricom Introduces Interest-Free M-Pesa Loans Up to Sh100,000

In a recent development, Safaricom has officially launched its interest-free credit service called “Faraja,” allowing customers to make purchases of goods up to Sh100,000. Initially, the financial regulator had blocked this service, but now it’s set to compete with other mobile loans in the market, such as Fuliza, an overdraft service on M-Pesa.

Faraja is accessible to Safaricom’s vast customer base of over 32 million users, enabling them to buy goods from businesses under the Lipa Na M-Pesa platform. The credit service permits purchases ranging from Sh20 to Sh100,000 without any interest charges, and the payment can be completed within a 30-day period.

Peter Ndegwa, the CEO of Safaricom, expressed his excitement about the collaboration with EDOMx, a Kenyan fintech firm, in providing Faraja. The service aims to help businesses boost their sales by allowing customers to buy now and pay later. Julian Kyula, CEO of EDOMx, emphasized that the product offering, including the zero-interest feature, is tailored to cater to the global merchant and consumer industry.

Currently, Faraja is available at various outlets, including Naivas Supermarkets, Goodlife pharmacies, and City Walk, among other merchants. Businesses using Faraja will receive immediate payment for their products or services when customers make a payment through the platform.

The partnership between Safaricom and EDOMx facilitates the extension of credit to businesses on the Lipa Na M-PESA platform, enabling them to receive immediate payments for Faraja purchases. This is a significant boost for the economy and businesses, and it is seen as a potential game-changer in the digital credit space.

The Central Bank of Kenya granted approval for EDOMx to launch Faraja as a digital credit provider, adhering to regulations that aim to regulate fintech services to protect consumers from predatory lending practices and privacy violations. With this green light, Safaricom expects Faraja to bring greater convenience and financial flexibility to its customers while stimulating business growth in the market.

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