Safaricom has unveiled an interest-free loan service that will allow millions of its customers to purchase goods up to Ksh100,000 (approx. p>
Users of the interest-free product known as Faraja can buy goods and services from as little as 20 Ksh ($0.17) up to a maximum of Ksh 100,000 ($846) and pay the same amount with no additional fees for other credit products.
However, only the normal M-Pesa transaction fees apply at the point of sale for the product to be financed by Equity Bank.
Faraja is slightly similar to the Lipa Later service currently on the market, except this time buyers take the goods from a list of selected retailers, without advance notice having to pay in installments.
It works like a digital credit card where a user has a credit limit of up to Ksh 100,000 (USD 846) depending on their creditworthiness to make purchases again immediately and then to a later time within of the 30-day window.
“You need only repay the outstanding Facility Amount as advanced to you by us (in whole or in part) using the designated payment method Paybill number or other channels, which are provided by us from time to time,” Safaricom says in a statement on its website.
Faraja promises to turn the tide in the mobile lending market and is poised to undercut the more expensive ones Lending products including Fuliza, KCB-Mpesa, Mshwari, and digital lending providers like Tala, Branch, and Zenka.
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