Kenya’s largest telecommunications company Safaricom has now made available the zero-interest credit option for purchases of items up to Sh100,000.
Faraja, a credit service, is anticipated to shake up the mobile loans market, which has been controlled by Fuliza, a mobile overdraft service available on M-Pesa.
More than 32 million Safaricom subscribers will be able to use the service to make purchases from merchants using the telco’s Lipa Na M-Pesa system on credit.
The service that had previously been blocked by the Central Bank of Kenya (CBK) will enable Safaricom customers to buy items for between Sh20 and Sh100,000 with no interest charges and pay for them in full within 30 days.
“Many businesses lose out on sales when a customer would like to make a purchase but lacks money at that point. We are glad to partner with EDOMx to offer Faraja empowering any business to grow their sales by enabling their customers to buy now and pay later,” said the telco’s CEO Peter Ndegwa.
Read: CBK Stalls Safaricom’s Faraja Loans Rollout Pending Approval
Faraja is a partnership between EDOMx Ltd, a Kenya-based financial technology firm, and Safaricom.
The service is currently available across all Naivas Supermarket outlets, Goodlife pharmacies, and City Walk amongst other merchants.
“In researching the global merchant and consumer industry, it was evident there is a substantial digital community that will appreciate our product offering including our zero interest initiative, plus much more in enhancing loyalty and customer-focused programs,” said EDOMx CEO Julian Kyula.
More than 606,000 enterprises on Lipa Na M-PESA will have access to the service for a negotiated facility cost that they must pay.
EDOMx will extend credit to businesses on the solution enabling them to receive payments immediately a customer makes a purchase on Faraja.