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Safaricom can now hold onto a subscriber’s M-shwari and KCB Mpesa account as collateral and security for any outstanding fuliza loans.
This is according to the terms and conditions that will give Safaricom the mandate to hold onto users’ funds on the two mobile money accounts in the event users default on the overdraft facility.
“You hereby agree and confirm that NCBA and KCB are entitled in it’s discretion to prevent or restrict you from withdrawing in whole or in part the funds in your accounts,” part of the requirements read.
The bank also reserves the right to not give any notice prior to withholding or recovering the outstanding loans.
The move, which will come into effect on November 14, 2021, is expected to cut the rate of loan defaulters on the overdraft facility.
At the same time, the new term also introduces a 1.083% interest rate on fuliza, whereas previously, the service charged a facility fee of the same amount,
Dennis Mbuvi, a communication officer at Safaricom said the new term clarify the fact that fuliza may be offered across additional M-pesa products
“As a financial service, Fuliza is offered by KCB and NCBA as licensed by the Central Bank of Kenya (CBK) hence the lien clause which is standard for products and also there in the current terms,” he said