In May 2023, Safaricom PLC launched a groundbreaking financial service, Fuliza ya Biashara, in Kenya in collaboration with KCB Bank Kenya. This innovative facility revolutionized how Kenyan businesses handle their financial transactions, particularly during cash flow constraints.
Fuliza ya Biashara in Kenya is an overdraft service providing business owners a much-needed financial buffer. Specifically designed for those using M-Pesa Business tills, it allows entrepreneurs to complete transactions even when their accounts have insufficient funds. This facility is particularly beneficial to the over half a million businesses in Kenya that rely on M-Pesa tills for their day-to-day operations.
The launch of Fuliza ya Biashara was a strategic move by Safaricom, aimed at expanding its range of services to include payment processing and offering tools that help businesses manage and grow. With more than 538,000 businesses already using M-Pesa for cashless transactions, Safaricom’s CEO, Mr. Peter Ndegwa, emphasized the company’s commitment to providing solutions beyond mere payment collection, focusing on the overall growth and management of businesses.
Why is Fuliza ya Biashara Significant?
Fuliza ya Biashara responded to a critical need in the Kenyan market. Statistics showed that 60% of M-Pesa transactions failed due to insufficient funds. This high rate of transaction failure not only hindered business operations but also affected overall economic growth. By ensuring that businesses could complete transactions despite fund shortages, Fuliza ya Biashara played a pivotal role in maintaining the continuity and fluidity of trade and commerce in Kenya.
Fuliza ya Biashara emerged as a lifeline for Kenyan businesses, particularly small and medium-sized enterprises. It offered a practical solution to overcome the frequent challenge of cash flow shortages, thus enabling companies to operate more efficiently and reliably.
How Fuliza ya Biashara in Kenya Works
Fuliza ya Biashara, a vital financial tool for Kenyan business owners, operates under specific eligibility criteria and a straightforward opt-in process. These Includes:
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1. Eligibility Criteria for Businesses
To be eligible for Fuliza ya Biashara, a business must have an active M-Pesa Business Till number that has been operational for at least six months. This requirement ensures that only established businesses with a track record of M-Pesa transactions can access the facility. Notably, Pochi La Biashara users are not eligible for this overdraft service.
2. Opting-in Process via USSD and M-Pesa App
Business owners can opt into Fuliza ya Biashara through two primary methods: the USSD code and the M-Pesa Business App.
a)Via USSD Code
- Dial *234# from the registered M-Pesa Business Till number.
- Navigate to ‘M-Pesa Business Till’ and select ‘Business Loans.’
- Choose ‘Fuliza ya Biashara’ and accept the terms and conditions.
- Upon successful registration, a limit will be assigned based on the business’s financial transaction history.
b)Via M-Pesa App
- Download and install the M-Pesa Business App.
- Open the app, select ‘Transact,’ then choose ‘Fuliza ya Biashara.’
- Accept the terms and conditions to view the assigned overdraft limit.
- Complete transactions using the facility as needed.
Supported Transaction Types
Once opted into Fuliza ya Biashara, businesses can perform several transactions, even with insufficient funds in their M-Pesa tills. These transactions include paying to a mobile number or customer, withdrawing at M-Pesa agents, paying bills via Lipa na M-Pesa, and transferring to another Buy Goods till. The service is designed to cater to various business transaction needs, offering flexibility and convenience.
Terms and Conditions of the Service
Fuliza ya Biashara offers a unique and convenient way for businesses to manage their cash flow. However, like any financial service, it comes with specific terms and conditions that users need to understand.
1. Credit Limits and Determination
The minimum overdraft loan Fuliza ya Biashara offers is Ksh 1,000, while the maximum limit is Ksh 400,000. These limits are assigned based on factors like the past transaction history of the business and the frequency of use of other Safaricom and M-Pesa services. The minimum transaction limit is Ksh 1, up to the allocated limit. Business owners can borrow multiple times as long as they stay within their credit limits.
2. Repayment Terms
Customers have 30 days to repay the loan, although it is advisable to repay as soon as possible. This increases credit viability and raises the limit for future use. Defaulting on the loan has consequences:
- The user’s ability to access the overdraft service is restricted.
- Their limitation is reduced.
- After 91 days of the due date, they risk being listed on Credit Reference Bureaus (CRBs).
3. Charges
Using Fuliza ya Biashara involves a 2% once-off fee and daily administrative fees, calculated based on the loaned amount. The daily maintenance fees range from Ksh 12 to Ksh 250, depending on the amount borrowed. It’s important to note that these fees are charged after a 24-hour interest-free period. Also, any repayment made is automatically deducted from the till’s collections every 30 minutes.
Here is a table that summarises Fuliza ya Biashara Fees in Kenya:
| Daily Maintenance Fees (Band KSh) | Tariff in KSh | Access Fee for every Disbursement |
|---|---|---|
| 1 – 999 | 0 | 2% |
| 0 – 2,499 | 12 | |
| 2,500 – 5,000 | 30 | |
| 5,001 – 15,000 | 50 | |
| 15,001 – 35,000 | 150 | |
| 35,001 – 70,000 | 200 | |
| 70,001 – 100,000 | 250 | |
| 100,001 – 400,000 | 250 |
Impact and Benefits of Fuliza ya Biashara
Fuliza ya Biashara, since its inception, has significantly impacted the Kenyan business landscape and economy.
1. Impact on Kenyan Businesses
Kenyan businesses used Fuliza ya Biashara to overdraw over KSh 6 billion on their M-Pesa tills in the first two months following its launch. This high volume of transactions underscores the service’s vital role in facilitating uninterrupted business operations.
2. Benefits for Small Business Owners and Entrepreneurs
The primary benefit of Fuliza ya Biashara is its ability to provide immediate financial assistance to businesses, enabling them to maintain operations even during cash flow shortfalls. This flexibility is crucial for small business owners and entrepreneurs, who often face unpredictable financial challenges. Moreover, the service’s ease of use and accessibility through mobile platforms make it a convenient option for many businesses.
3. Future Prospects and Economic Contribution
Fuliza ya Biashara is expected to continue playing a significant role in supporting and strengthening the Kenyan economy. Its ability to provide quick financial solutions aids in the resilience and growth of small businesses, which are the backbone of many developing economies.
In conclusion, Fuliza ya Biashara addresses immediate financial needs and contributes to the broader economic stability and growth in Kenya. Its success demonstrates the potential of innovative financial solutions in supporting business sustainability and economic development.
FAQs (People Also Ask)
1. What is Fuliza ya Biashara, and how does it work?
- Fuliza ya Biashara is an overdraft service by Safaricom and KCB Bank, designed for Kenyan business owners using M-Pesa Business tills. It allows them to complete transactions even when their accounts have insufficient funds. Businesses can opt-in via USSD or the M-Pesa Business App, and once registered, they receive a credit limit based on their transaction history.
2. Who is eligible for Fuliza ya Biashara?
- Eligibility for Fuliza ya Biashara requires having an active M-Pesa Business Till number in operation for at least six months. Businesses using Pochi La Biashara are not eligible for this service.
3.What are the fees associated with Fuliza ya Biashara?
- Using Fuliza ya Biashara involves a 2% access fee and daily maintenance fees ranging from Ksh 12 to Ksh 250, based on the borrowed amount. These fees are applicable after a 24-hour interest-free period.
4. How can I increase my Fuliza ya Biashara limit?
- The Fuliza ya Biashara limit is determined by your business’s transaction history and performance with M-Pesa services. Regular use of M-Pesa services, prompt repayment of the overdraft, and increased transaction volumes can help raise your limit.
