Safaricom And Pezesha Team Up To Offer New Loan Option To Small Businesses in Kenya

Safaricom has reportedly teamed up with Pezesha, a Kenyan Fintech service provider, to offer a new loan credit option called Mkopo wa Pochi which allows small businesses to borrow money directly using their M-PESA business accounts. While it is in addition to other Safaricom’s loan products, like M-Shwari and Fuliza, the new offering has been made available via an update on Safaricom’s super app. It is going to work in tandem with Safaricom’s business wallet tailored for small business owners, known as Pochi la Biashara.

This partnership has opened up a new avenue for Pezesha, granting them access into Safaricom’s immense customer base exceeding 34.4 million active users of the M-PESA mobile money service, marking Pezesha’s inaugural foray into Kenya’s vast mobile money market.

Loans disbursed through Mkopo wa Pochi come accompanied by a one-time access fee amounting to 2.76% of the borrowed sum. Borrowers are granted an initial 7-day term, with an optional 7-day extension period. However, exercising this extension option incurs a further one-time fee equating to 3.85% for the comprehensive 14-day duration. Any tardiness in repayment is met with a punitive 1% daily penalty fee, applicable for up to 7 days following the due date.

In assessing a borrower’s eligibility, Pezesha employs a multi-pronged approach harnessing an array of tools and data sources. Credit bureaus are consulted to scrutinize for any prior instances of loan delinquency. Additionally, Pezesha conducts an in-depth examination of the borrower’s business transaction records with Safaricom, their mobile money account activities, and credit information obtained from the Credit Reference Bureau. Furthermore, prevailing market conditions are factored into this comprehensive evaluation process.

In a significant boost to its technological capabilities, Pezesha has recently secured a $500,000 Technical Assistance grant from the United States International Development Finance Corporation (DFC) in May 2024. These funds will be channeled towards leveraging advanced computing technologies to refine and enhance Pezesha’s credit scoring algorithms, enabling more accurate and insightful risk assessments.