Safaricom and Pezesha Launch New Loan Service for Small Businesses

Empowering Small Businesses

Safaricom, Kenya’s leading mobile network provider, has partnered with Pezesha, a renowned digital lender, to introduce a new credit service for small business owners. This service, named Mkopo wa Pochi, expands Safaricom's portfolio of financial products, which already includes M-Shwari and Fuliza. The new offering will allow small business owners to access loans directly through their M-PESA business accounts.

Mkopo wa Pochi: Seamless Access to Credit

Mkopo wa Pochi, available through an update on Safaricom’s M-PESA super app, will work alongside Pochi la Biashara, Safaricom’s business wallet designed for small enterprises. This integration marks Pezesha’s entry into Kenya’s mobile money market, leveraging Safaricom's vast customer base of over 32.4 million active M-PESA users.

Strategic Partnership

The collaboration between Safaricom and Pezesha 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 for Safaricom between March 2023 and March 2024. Pezesha, known for its expertise in digital lending and credit partnerships, brings valuable experience from working with Marketforce, Kyosk App, and Rocket Health.

Loan Terms and Conditions

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

Creditworthiness Assessment

Pezesha will evaluate the creditworthiness of Pochi la Biashara customers using tools such as credit bureaus that list loan defaulters. According to Safaricom’s terms and conditions, Pezesha may assess creditworthiness based on various factors including business transaction history with Safaricom, mobile money account transaction history, credit information from the Credit Reference Bureau, product usage history, and prevailing market conditions.

Pezesha's Technological Advancements

In May 2024, Pezesha received a $500,000 grant from the U.S. International Development Finance Corporation (DFC) to improve its credit scoring technology. This grant follows an $11 million pre-Series A funding round in 2022 led by Women’s World Banking Capital Partners II, highlighting Pezesha's commitment to advancing its technological capabilities.