Safaricom announced interest-free loans on its M-Pesa platform this week. Faraja loans will allow subscribers to purchase items from a minimum Sh20 to a maximum of Sh100,000 and pay later.
The service will be supported by Equity Bank, and will be available at selected merchants such as Naivas, Good Life Pharmacy and Citi Walk.
Safaricom will not charge interest on the loans, however, the usual M-Pesa transaction charges will be applicable. Users will also be required to pay back the credited amount within 30 days.
“You will only be required to repay the outstanding facility amount as advanced to you by us (in whole or in part) using the designated Paybill number or such other channels as provided by us from time to time,” Safaricom says in a statement on its Website.
The loan facility is available to qualifying Safaricom subscribers. Users must have an active line and their credit limit will be determined by the individual’s credit rating.
Faraja will only be accessible through Paybill and Till Number options, unlike the overdraft facility Fuliza, which allows clients to send money.
Here’s how to access the service
- If you are a subscriber, you can opt in to the service by dialing *799# and selecting ‘OPT in’
- You will then be prompted to enter your M-Pesa PIN after which Safaricom will send your Faraja credit Limit.
- To use the service at the merchants’, dial *799# and select the ‘Buy Goods’ or ‘Paybill’ option.
- Enter the amount and your M-Pesa PIN to initiate a transaction.
- Safaricom will send a notification on the success/failure of the transaction.
Safaricom is planning to roll out the service to more merchants to include fuel stations, restaurants and more supermarkets.