Saddled by a shoestring budget, SMEs and consumers find means to cope

 Saddled by a shoestring budget, SMEs and consumers find means to cope

Last month, Safaricom and partners NCBA and KCB restructured Fuliza, waiving the daily maintenance fee for customers that repay in three days.

For small business owners across Kenya, rising inflation is not just costing them money. It is also costing them their most prized stakeholders: customers.

At his roadside kiosk in Ndenderu, off Limuru Road, Davis Wanjau has raised the prices of nearly every product and switched to different brands to keep up with the rising costs of household goods.

Over the past year, however, Davis says he has lost dozens of his regular customers. Some have traded down, especially since the onset of the Covid-19 pandemic, while others have relocated to new residential areas.

One customer, who has been a regular for years, stopped by to inform Davis he has opted to mill maize at a local posho mill for his staple – unga – since he can no longer keep pace with the high price of maize meal on sale in his shop.

“I need to budget, so I won’t be coming in here every day for costly unga,” the customer said.

Across the road, Michael, who runs an auto repair yard, said he has seen his regular customers delay maintenance repairs of their cars, a situation he blames on the high cost of living.

According to the latest economic performance data from the Kenya National Bureau of Statistics (KNBS), the country’s food and non-alcoholic beverages index increased by 15.5 percent in the 12 months to September 2022. In the period under focus, the transport index edged up by 10.2 percent, KNBS said.

With shifting consumer patterns due to inflation, Davis, who often uses Fuliza to replenish his fast-moving stocks such as milk, mandazi, and bread says he has been grappling with increasing running costs for his venture, which he depends on to feed his family of four.

Davis is among millions of people across Kenya who have turned to Fuliza to help meet bills conveniently amid a wave of the rising cost of goods. The easing of daily maintenance fees for the overdraft facility will give them a hand up in the prevailing tough economic times.

Read also: Hustler loans: Safaricom, KCB, and NCBA cut Fuliza rates by 50 percent

Launched in January 2019, Fuliza is an M-PESA innovation that enables mobile money users to complete their transactions when they are short of the required money.

“The cut in Fuliza fees by up to 50 percent by Safaricom comes as a huge relief to me. Even better, there is a three-day grace period for borrowing less than Kes1,000,” Davis noted, adding that his business will harness the new offering to replenish stocks with ease.

He is optimistic that most of the customers, who also use Fuliza to pay for their regular purchases will equally experience a huge relief.

Last month, Safaricom and partners NCBA and KCB restructured Fuliza, waiving the daily maintenance fee for customers that repay in three days.

Customers who repay after three days are set to enjoy up to a 50 percent cut on the daily maintenance fee.

The companies said the move will go a long way in benefiting over 80 percent of M-PESA customers such as Davis and his poor of customers, who often seek to complete their payment transactions using Fuliza.

“In line with our purpose of transforming lives and in the spirit of Tuinuane, we have introduced a free daily maintenance fee period for Fuliza transactions of Kes.1,000 that repay within the first three days. This simple change will reset the use of the Fuliza service to its intended purpose,” said Safaricom CEO Peter Ndegwa.

Tuinuane is a Safaricom-led campaign that champions brotherhood, optimism, and confidence in realizing a brighter future for individuals and communities across Kenya by challenging the citizens to uplift one another.

NCBA Chief Executive Officer John Gachora said, “From the data that we have, it is clear that the original intent for Fuliza to be a short-term credit facility has evolved. Since the Covid-19 pandemic, many customer M-PESA wallets are now remaining overdrawn for 14-19 days. This is what we intend to address with this announcement (revision of Fuliza rates).”

The revision of Fuliza to new, lower rates will help millions of M-PESA customers across Kenya adapt and make the most out of the changing economic climate where small adjustments to how one uses money potentially make all the difference.



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