Safaricom will take 4 million customers off the CRB list and give them access to new loans, according to Ndegwa.
Safaricom will take 4 million customers off the CRB list and give them access to new loans, according to Ndegwa. Now, Safaricom CEO Peter Ndegwa says that the company wants the Credit Reference Bureau (CRB) to remove the names of about four million customers who are on a blacklist by the end of next month.
Ndegwa said on Citizen TV’s “News Night” show on Tuesday that Safaricom is in talks with KCB Bank and NCBA to make the move happen. The goal of the move is to increase revenue by increasing the customer margin.
“Today, we have cut the average cost of Fuliza by 50%. We’re also working with NCBA and KCB as our banking partners, and they’re going to fix four million customers who were previously on the CRB list, Ndegwa said.
“We will take them off the list in the CRB so that they can get new loans. This means that 4 million more customers will be able to use Fuliza and other lending products…
The work will start in November.”
Even though the Safaricom boss admitted that the move could cost the company money, he said that removing the customers from the credit list would allow them to borrow again, which would lead to more people using Fuliza and other money-lending services.
He said that this would eventually lead to a direct increase in customers, making up for the lost income.
“Yes, Safaricom and the banks will lose a lot of money, and our income will go down. Since we cut the price, more people are using Fuliza, more people are using it more often, and more money is being sent through Fuliza,” he said.
“We think that the extra use by customers will make up for the lost revenue over time. We think it will be better for the future of this product and its customers if it can last longer and costs less.
Ndegwa said that the company cut the costs of Fuliza because it was focused on its long-term goal of getting more customers. This means that more people will subscribe to the product and the company will make more money.
He also said that customers wanted interest rates on loans to be lower and more affordable, so the company wanted to meet the needs of the public by acting as an emergency lender.
“7 out of 10, if not more, of our customers in the whole country use Fuliza. Anyone you see on the street has probably used Fuliza at some point,” he said.
“We were careful because there were complaints about how much Fuliza costs and how it is used. For example, people sometimes extend Fuliza. It is meant to be used as a short-term loan in case of an emergency. If you only use it for a few days, it’s pretty cheap.”
He also said, “What we did was change the price so that the first three days are free, especially if your Fuliza limit is less than Ksh.1,000. After that, you pay a daily maintenance fee.” If a customer pays within 4 or 5 days, Fuliza will be one of the most affordable overdraft facilities.”
