Safaricom Partners with Pezesha to Launch New Credit Product for Small Businesses

Safaricom, Kenya’s leading mobile network operator, has teamed up with Pezesha, a digital lending platform, to offer credit to small business owners.

This new product, called Mkopo wa Pochi, is set to enhance Safaricom’s existing suite of loan services, which includes M-Shwari and Fuliza. With Mkopo wa Pochi, small business owners can now borrow funds directly through their M-PESA business accounts.

The Mkopo wa Pochi service is available via an update on Safaricom’s M-PESA super app, and it complements Pochi la Biashara, Safaricom’s business wallet tailored for small enterprises.

This partnership marks Pezesha’s entry into Kenya’s mobile money market by leveraging Safaricom’s extensive customer base of over 32.4 million active M-PESA users. The collaboration combines the strengths of both companies: Safaricom’s Pochi la Biashara boasts over 632,000 active merchants and processed $564 million (KES 73 billion) in transactions, generating $6 million (KES 800 million) in revenue from March 2023 to March 2024. Pezesha brings its expertise in digital lending, having previously partnered with Marketforce, Kysok App, and Rocket Health.

Mkopo wa Pochi offers loans with a one-time access fee of 2.76% on the borrowed amount. Borrowers are given a 7-day term with an optional 7-day extension. Extending the loan incurs a one-time fee of 3.85% for the entire 14-day period, while late repayments are subject to a 1% daily penalty for up to 7 days.

Pezesha will determine the creditworthiness of Pochi la Biashara customers using various assessment tools, including credit bureaus that track loan defaulters. According to Safaricom’s terms and conditions for the product, Pezesha’s credit assessment will consider factors such as the business transaction history with Safaricom, the user’s mobile money account transaction history, credit information from the Credit Reference Bureau, and the user’s previous interactions with the product, alongside prevailing market conditions.

This strategic partnership aims to provide small business owners with more accessible and flexible financing options, ultimately supporting the growth and sustainability of small enterprises across Kenya.