NAIROBI, Kenya- In a move set to improve financial access for small business owners in Kenya, Safaricom has teamed up with digital lender Pezesha to launch a new loan service, Mkopo wa Pochi.
This innovative service will enable over 600,000 users of Safaricom’s Pochi La Biashara payment platform to borrow small loans directly through their M-PESA business accounts.
A Game-Changer for Informal Businesses
Mkopo wa Pochi, now available on the M-PESA super app, targets informal business owners who typically struggle to access traditional bank loans due to lack of collateral.
With a straightforward one-time access fee of 2.76pc on the principal amount, this new service offers a much-needed financial lifeline.
Borrowers can take advantage of a seven-day loan term, with the option to extend for an additional seven days at a 3.85pc fee.
“This initiative underscores our commitment to empowering communities with the financial tools they need to thrive,” said Safaricom in a statement.
Leveraging Pezesha’s Expertise
Pezesha’s role in this partnership is crucial. The fintech company brings extensive experience in credit management, which will be instrumental in assessing borrowers’ creditworthiness.
They will utilize credit bureaus to ensure defaulters are listed, thereby maintaining a robust credit system.
In May 2024, Pezesha secured a $500,000 grant from the U.S. International Development Finance Corporation (DFC) to improve its credit-scoring technology.
This funding, combined with an $11 million pre-Series A funding round in 2022, positions Pezesha as a leader in the digital lending space.
“Our partnership with Safaricom gives us access to their vast customer base of over 32.4 million active M-PESA users, enhancing our ability to provide tailored financial solutions,” said Hardy Pemhiwa, President & Group CEO of Cassava Technologies, Pezesha’s parent company.
Empowering Kenya’s Small Business Owners
Mkopo wa Pochi is a strategic addition to Safaricom’s suite of loan products, which includes the popular M-Shwari and Fuliza services.
These platforms have been pivotal in providing emergency short-term loans to millions of Kenyans, helping to foster financial inclusion and economic growth.
The introduction of Mkopo wa Pochi is timely, as it addresses the specific needs of small business owners who often require quick, manageable loans to stock up their enterprises.
With the increasing penetration of mobile phones and the advancement of digital technology, such services have become more accessible and essential.
