Understanding Fuliza, The M-Pesa Overdraft Facility By Safaricom
Earlier this month, Safaricom announced the launch of Fuliza, an overdraft facility available to all M-Pesa users. This product is supposed to make it possible for customers to fully pay for goods and services via Paybill and Buy Goods and to send money, even when they do not have sufficient funds.
How it works
Fuliza works like a bank overdraft facility. Basically, if you need to buy an item and your M-Pesa account does not have sufficient funds, Safaricom funds the difference, then as soon as your M-Pesa account is loaded, they deduct their loan plus the facility fee (or interest). The amount you can borrow via Fuliza depends on your overdraft limit.
Let us use an example.
Say you are buying an item that costs 2,000 shillings, and you only have 1,000 shillings in your M-Pesa account. Depending on the amount of overdraft you qualify for, Fuliza will allow you to borrow the difference for a maximum period of 30 days. Once you pay for the item, your M-Pesa balance will stand at -1,000. For each overdraft you take, you will be charged 1% one-off fee, and for each day you have borrowed, the facility will have daily charges as per the tariff below (source). Normal M-Pesa transaction charges apply.
| Band | Tariff | Promotional Tariff for 30 day from launch |
|---|---|---|
| 0-100 | One-time fee of Ksh 2 | One-time fee of Ksh 0 |
| 101-500 | Ksh 5 per day | |
| 500-1,000 | Ksh 10 per day | |
| 1,001 - 1,500 | KSh 20 per day | |
| 1,501 - 2,500 | Ksh 25 per day | |
| 2,501 - 70,000 | Ksh 30 per day |
Just like a bank overdraft, if you have an outstanding Fuliza facility, any money that comes into your M-Pesa will go towards offsetting the balance until it is cleared.
How to sign up
Fuliza is available on the MySafaricom app or via USSD *234#. To sign up, you must have used M-Pesa for at least 6 months, and the product allows you to sign up with multiple M-Pesa numbers.
Conclusion
Like all loan products, it is important to understand the terms and conditions before you borrow. And please use debt responsibly! On this blog, we advocate for building up savings to cover for that item you really want to buy, plus for emergencies. Sign up for the #52WeekChallenge by downloading the Money Box tracker and opening an M-Shwari Lock Savings Account. This way, you will break free from expensive consumer/emergency loans.
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