Safaricom wants M-Pesa to start issuing high-value loans such as car loans if the proposal to separate the mobile money platform from the telecommunications sector is adopted.
The telecom operator says the separation will leave Safaricom under the Communications Authority of Kenya (CA) while M-Pesa will be regulated by the Central Bank of Kenya (CBK), allowing it to deepen its financial services.
“What could happen is maybe if we take M-Pesa out of Safaricom and it was regulated by the CBK, then we could ask the CBK to offer more services which are not necessarily telecommunications services,” Safaricom Chairman Michael Joseph said in an interview. with The standard.
“It could be financial services. We could lend you money to buy a car, we can’t do that today. It is therefore possible to offer a greater range of services to choose from.
The plan could allow Safaricom, which rolled out M-Pesa in March 2007, to bring financial services competition closer to the doors of banks, which had initially resisted launching the Safaricom platform.
M-Pesa began as a service for sending and receiving money before branching out into payment for goods and services and then offering small loans through its Fuliza overdraft product.
The phone company also operates M-Shwari and KCB M-Pesa in partnership with NCBA and KCB respectively, the arrangement allowing them to share revenue.
Safaricom had initially resisted calls to separate its telecommunications business from that of mobile money when the dominance debate erupted. But with the growth of the Fuliza service which now averages 1.3 billion shillings per day and Fuliza’s plans to roll out businesses, a CBK license could remove obstacles such as caps on the maximum money it can receive. can lend.
Safaricom wants to operate over 400,000 businesses currently using the Lipa na M-Pesa service to provide the overdraft facility for working capital needs such as increasing inventory.
Currently, the amount that M-Pesa customers can send in a day or keep in their digital wallet is capped at Sh300,000 with a maximum per transaction capped at Sh150,000.
The same 300 shillings limit also applies to Pochi la Biashara, a product that allows customers who own informal businesses such as food vendors, kiosk owners, boda-boda operators and clothing merchants to opportunity to receive and separate business funds from personal money. on their M-Pesa number.
CBK, under anti-money laundering regulations, does not allow a registered M-Pesa user to send more than Sh35,000 to unregistered users. Such caps have seen Safaricom also set the Fuliza limit at Sh70,000, meaning even customers with high value transactions and a good repayment history cannot borrow more.
Obtaining a CBK license can help the telecommunications company overcome these caps and compete with digital lenders, microfinance banks, and commercial banks.
An additional 700,000 customers joined the Fuliza service in the fiscal year ending March last year to bring the total number of daily active users to 1.7 million.