Kenyans borrowed Sh2.3 billion daily on Fuliza in 2023

At least Sh2.3 billion shillings was borrowed on Safaricom's mobile money overdraft product, Fuliza every day in the year ended March 31, 2024, the company's data shows. 

The amount borrowed on Fuliza daily is enough to construct close to 3,000 standard classrooms in the country, based on the government's estimate of Sh788,000 per class. 

In 2022, the government set the cost of constructing one classroom at Sh788,000, a reduction from the Sh1.2 million previously used as a guideline by the Ministry of Education on a recommendation from the Department of Housing and Urban Development. 

The amount can also help set up 460 standard dispensaries each costing Sh5 million, betraying high debt appetite amongst households who largely depend on the overdraft facility to meet daily needs. 

According to the telco's financial results released in Nairobi on Thursday, the value of disbursements went up by 18.9 per cent year on year from Sh701 billion to Sh834 billion.

Safaricom has attributed this to the affordability nature of Fuliza as a fit-for-purpose solution to the market.

According to the telco, Fuliza subscribers rose by 100,000 to 7.5 million from 7.4 million a year ago, hence a ticket size of Sh306 down from Sh320 in the first six months of the year. 

The overdraft facility, however, weighed down M-Pesa's contribution to the company's service revenue.

The report shows that the Financial Services category saw a 9.2 per cent year-on-year decline in revenues, primarily due to the price optimization of our Fuliza product.

Excluding Fuliza, the growth was 23.9 per cent driven by the other credit products. 

"We reduced Fuliza rates by nearly 50 per cent in the second half of the last fiscal year. The value of disbursements went up by 18.9 per cent per cent year on year from Sh701 billion to Sh834 billion attesting to the affordability nature of Fuliza as a fit-for-purpose solution to the market,'' Safaricom's chief finance officer Dilip Pal said. 

Even so, M-Pesa was the biggest contributor to the firm's service revenue, officially crossing the 40 per cent mark.

"Our success is a testament to the hard work, dedication, and resilience of our team, and I am confident that we will continue to build on this momentum in the years to come," Ndegwa stated,

The mobile money arm of the listed telco's total earnings rose to Sh139.9 billion, representing 42 per cent of Safaricom's total service revenue. This is an increase from 19.36 per cent the previous year.

The M-Pesa ecosystem continued to expand, with the total value and volume of transactions growing by 9.6 per cent and 33.9 per cent year on year, reaching Sh40.2 trillion and 28.3 billion transactions, respectively.

Chargeable transactions per one-month active customer now stand at 31.5 up from 23.5 transactions last year, a growth of 33.9 per cent. 

An increase in usage drove the 16.1 per cent year-on-year growth to drive the 19.4 per cent year-on-year growth in revenue.

Both Lipa Na M-Pesa (merchant payments) and Pochi la Biashara (informal business wallets), which make up 21 per cent of the business payments, contributed 11 per cent of the growth in M-PESA revenues in the period under review.

Lipa na M-Pesa revenues grew by 38.2 per cent to Sh7.3 billion driven by growth in usage, with volumes more than doubling in the period.

Pochi La Biashara made significant progress with the revenues more than tripling to Sh800 million and the Pochi tills more than doubling to 633,000, similar levels to the merchant tills. 

Global payments represent a smaller portion of M-Pesa revenue at 2.5 per cent and grew 20 per cent year on year.

"We expanded our international payment corridors to over 200 markets,'' Pal said. 


Mobile data made up 18.2 per cent of the telco's service revenue, contributing  27.8 per cent of the growth in service revenue.

The second half of the year performed much better recording a 23.2 per cent year-on-year compared to the 12.5 per cent year-on-year growth.

 Growth in revenue driven by ARPU growth by 1.5 and 13.9 per cent year-on-year growth in chargeable customers.

"We are pleased to report that the number of smartphone users has grown by 13.0% year-on-year, reaching 22.9 million. Of these users, 76 percent (about 17.5 million) utilize 4G plus devices which has recorded an impressive growth of 28.9 per cent year on year,'' the telco said.

The firm's full-year rate per megabyte (MB) dropped by 4.6 per cent year-on-year to 6.4 cents, making data more affordable for our customers. This is the slowest drop recorded in the past years.

Overall, the firm's net earnings shrunk 18 per cent to Sh42.6 billion compared to Sh52.4 billion in the previous financial year, weighed down by high operational costs in Ethiopia and a struggling economy, stunted by forex volatilities. 

However, the firm's service revenue grew 12 per cent to Sh330 billion.

"Our double-digit service revenue growth was driven primarily by impressive growth in M-Pesa, mobile data, and fixed data revenues. Mobile data grew by 18 per cent, M-Pesa 19.4 per cent and fixed revenue grew by 1 per cent year-on-year."

SOURCE: The Star / Victor Amadala