If you are old enough – Peculiar – is a word Safaricom’s founding CEO Michael Joseph used to describe Kenyans’ calling habits.

Kenyans had this habit of calling each other countless number of times, for a few seconds. 

The caller’s intent would be to find out the recipient’s location.   

The caller would most probably be waiting for the receiver. They might have agreed to meet, say, at Kenya Cinema at 1pm.  Come the agreed time and meeting place, one party had not arrived. 

A quick 10 second phone call would be the remedy. 

“Uko Wapi (Where are you?)” the person who arrived on time would ask the other party.

“Ninakuja. Niko njiani. Nipe 10 minutes (I’m coming. I am on my way. Give me 10 minutes)” the offender who was late would say. 

So Mr Joseph complained that this peculiar calling habit clogged the networks. Safaricom would have to invest billions to ensure calls did not drop. 

Then in 2019 - two decades after Safaricom had rolled out in the country - it noticed another peculiar trend.  

Most Kenyans were not completing their M-Pesa transactions because they did not have enough money in their account. 

M-Pesa is a transformative mobile money transfer service which Safaricom’s Mr Joseph took a bet on in 2007. 

In three simple and convenient steps an individual sends money to a recipient in any part of Kenya. 

The service evolved from money transfer to the ability to pay for goods and services. 

And so in 2019 – just over a decade after M-Pesa had been in use – Safaricom noticed that peculiar habit. 

Why would Kenyans try to send money they did not have in their M-Pesa wallets? Did they not know their M-Pesa balance? Were they desperate for money? 

Safaricom asked the right questions. What if we lent the individuals money to complete their transactions? What if they could borrow as little as Ksh100? 

The amount an individual would qualify to borrow would be based on their M-Pesa transactions. No security is needed. Loan approved in seconds. 

To compensate for the risk, interest rates would be very high – 300 per cent. 

Fuliza – a Kiswahili word meaning continuously flowing - was born from this business process. The money would continuously flow. 

It would be an overdraft facility for individuals accessible on phone at annual interest rates close to 300 per cent – 20 times what banks charge.  

You don’t have enough money to complete a transaction, no problem. Safaricom would be there for you. 

Fuliza would be a partnership with NCBA Bank and KCB Bank – because Safaricom – did not have the license to lend money. 

Fuliza has evolved in the three years it has been in existent. It started off as a means to lend to complete transactions. 

The reason Fuliza is quite expensive is because Safaricom, NCBA and KCB – do not have any security – land, log book, shares when lending to an individual.

All the three parties have is a trend on an individual users, Mpesa – transactions.  The data gives an indication of how much of the overdraft an individual can qualify for. 

Under the new rates – which came into place from October 1st, 2022 - If someone borrowed Ksh1, 000 they would pay back Sh150 after a month. 

Compare this to a bank where for every Ksh1, 000 they borrowed for 30 days they would pay back Ksh12.5. Banks need some form of security. 

Fuliza is now big business. It has become the biggest loan facility in the country with individuals borrowing close to Ksh1.6 billon daily. 

Man being a creature of habit – the M-Pesa transactions - will pretty much maintain the same trend. 

This trend analysis has been correct. 

Safaricom had been learning. 

In 2013, the telecommunication firm in partnership with NCBA launched a loan facility M-Shwari – where a borrower could borrow money and then repay after a certain date. 

The difference between Fuliza and M-Shwari was that – with Fuliza any money that went into M-Pesa went to clear automatically clear the outstanding debts. 

With M-Shwari an individual is the one who would have to transfer the money from their M-Pesa wallet into their M-Shwari to clear any outstanding debts. 

Human nature being what it is – many Kenyans defaulted on M-Shwari. They did not have it in them to transfer the money by their own free will to pay for the M-Shwari loan.

But with Fuliza – Safaricom, NCBA and KCB – hit the jackpot by making the payments automatically deducted once the cash got into the M-Pesa wallet. 

That is what has made Fuliza grow.