Kenya’s biggest telecoms operator, Safaricom, notched up one-million users for its new overdraft feature on the M-Pesa platform in just eight days, surpassing its CEO Robert Collymore’s expectations, he said on Thursday.
Started 11 years ago as a service to allow Kenyans without access to the banking network to transfer money via cellphones, M-Pesa now offers loans and savings in conjunction with local banks, as well as merchant payments services.
Safaricom, part-owned by Vodacom and Britain’s Vodafone, launched the new overdraft feature called Fuliza two weeks ago.
“We got a million [customers] by day eight and by day eight we had lent $10m. Now we are probably at $15m,” Collymore said in an interview.
“If you don’t have enough cash, you simply draw down from the overdraft and you keep drawing down until you have got to your overdraft limit, which is predetermined by an algorithm.”
Fuliza is underwritten by Kenyan lenders KCB Group and CBA Group, which already had partnerships with Safaricom to offer short-term loans on the M-Pesa platform.
M-Pesa has about 20-million active users in Kenya and it has become the principal driver of profit growth for the dominant telecoms provider in East Africa, as revenue from traditional voice and text services has flattened off.
Collymore said he would welcome any potential takeover of the smallest operator, Telkom Kenya, by the second biggest operator Bharti Airtel, following recent media reports of such a deal.
As the market leader with 65% of mobile phone users, or 30-million subscribers, Safaricom has long been dogged by regulatory proposals to clip its wings to boost competition.
“It is a good thing because what you create is an entity which has got at least 30% market share. There is a critical mass that any player needs to get to, to be operating sensibly,” he said of the potential Airtel/Telkom dea