Safaricom, East Africa’s leading mobile network operator, has partnered with digital lender Pezesha Africa to launch Mkopo wa Pochi, a loan service for Kenyan small business owners.
This builds on Safaricom’s successful existing offerings like M-Shwari and Fuliza.
Kenya’s digital lending market has witnessed explosive growth, with Safaricom leading. As of 2022, Fuliza, their overdraft service, boasted over 7.8 million users, facilitating daily loans of KES 1.57 billion ($12 million).
M-Shwari serves over 10 million customers, disbursing 50,000 loans daily. The government’s launch of the Hustlers’ Fund in 2022 further highlights the sector’s significance.
This collaboration leverages the strengths of both companies. Safaricom’s extensive reach with over 32.4 million active M-PESA users and Pezesha’s expertise in digital lending. The aim is to expand financial inclusion for Kenyan small businesses.
Pochi la Biashara, Safaricom’s business wallet for micro-entrepreneurs, has over 632,000 active merchants. It processed $564 million (KES 73 billion) in transactions and generated $6 million (KES 800 million) in revenue for Safaricom between March 2023 and March 2024.
Pezesha has a proven track record in credit partnerships, having collaborated with entities like Marketforce, Kyosk App, and Rocket Health.
Mkopo wa Pochi
Mkopo wa Pochi simplifies access to credit for small businesses through their M-PESA business accounts. Integrated into the updated M-PESA app, it complements Pochi la Biashara, targeting micro-entrepreneurs like food vendors, kiosk owners, boda-boda operators, and secondhand clothes dealers.
Features
The product offers a base loan term of 7 days with a single, optional 7-day extension (incurring a one-time fee of 3.85% for the entire 14 days).
In terms of fees, a one-time access fee of 2.76% on the borrowed amount applies. Late repayments incur a daily penalty of 1% for up to 7 days.
Pezesha uses various tools, including credit bureaus and Safaricom’s transaction data, to assess Pochi la Biashara customers’ creditworthiness, ensuring responsible lending.
In addition, highlighting their commitment to advanced credit scoring, Pezesha secured a $500,000 grant from the U.S. International Development Finance Corporation (DFC) in May 2024. This follows an $11 million pre-Series A funding round in August 2022, led by Women’s World Banking Capital Partners II.
