Safaricom has officially launched the ‘Faraja’ credit service, providing customers with interest-free M-Pesa loans of up to Sh100,000 for the purchase of goods.
Initially faced with regulatory obstacles, the telecom giant’s zero-interest credit service is set to disrupt the mobile loans market, challenging existing products like Fuliza.
With over 32 million customers on M-Pesa, this service, available under the Lipa Na M-Pesa platform, allows users to make purchases ranging from Sh20 to Sh100,000 with a 30-day repayment window.
CEO Peter Ndegwa expressed excitement about the Faraja partnership with EDOMx, a Kenyan financial technology firm, as it empowers businesses to boost sales by enabling customers to buy now and pay later.
“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 Peter Ndegwa, the CEO of Safaricom.
The service is already available at Naivas Supermarket outlets, Goodlife pharmacies, City Walk, and other merchants.
EDOMx will extend credit to businesses on the platform, ensuring they receive immediate payments upon customer purchases, cementing Safaricom’s position as a key player in the evolving digital credit landscape.
The Central Bank of Kenya’s approval for EDOMx as a digital credit provider further validates the product’s potential and aligns with the bank’s efforts to regulate fintech and protect consumers from predatory lending and privacy violations.