Kenya’s leading telecommunication company, Safaricom, has partnered with Pezesha, a digital loan lender, to offer credit to small business owners, expanding Safaricom’s range of loan products.
Safaricom currently offers about seven loan products, including the land loan, Ustawi loan, and Fanikisha loan. The new product, Mkopo wa Pochi, allows small business owners to borrow money directly through their M-Pesa business accounts.
M-PESA is Africa’s most successful mobile money service and fintech platform, serving approximately 51 million customers.
Meanwhile, Pochi is accessible through Safaricom’s M-Pesa super app via an update and complements Pochi la Biashara, Safaricom’s business wallet for small business owners. This partnership also marks Pezesha’s entry into Kenya’s fintech space, leveraging Safaricom’s extensive customer base of over 32.4 million active M-Pesa users.
The new loan product leverages the strengths of both companies. Safaricom’s Pochi la Biashara supports over 632,000 active merchants and processed $564 million in transactions, generating $6 million in revenue from March 2023 to March 2024. Pezesha, known for its credit partnerships and expertise in digital lending, has collaborated with Marketforce, Kyosk App, and Rocket Health.
However, loans under Mkopo wa Pochi incur a one-time access fee of 2.76% on the borrowed amount. Borrowers have a 7-day term with a single optional 7-day extension.
Extending the loan entails a one-time fee of 3.85% for the entire 14-day period, and late repayments accrue a 1% daily penalty for up to 7 days. Additionally, Pezesha assesses the creditworthiness of Pochi la Biashara customers using tools like credit bureaus, which list loan defaulters.
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“Pezesha may conduct a credit assessment based on various factors, including your business transaction history with Safaricom, mobile money account transactions, credit information from the Credit Reference Bureau, product usage history, and prevailing market conditions,” states Safaricom on the product’s terms and conditions page.
