ANOTHER FULIZA? SAFARICOM LAUNCHES A NEW MOBILE LOAN.
Safaricom on Wednesday, March 30 unveiled its first Sharia-compliant mobile loan, offered in partnership with Gulf African Bank.
Known as Halal Pesa, the loan offer will allow Safaricom customers to borrow up to Ksh20,000. It has a repayment period of 30 days.
Borrowers will repay the amount plus a five percent margin.
Customers’ initial loan limits on Halal Pesa will be based on their M-Pesa transaction history. The limit will increase with continued use of Halal Pesa.
“Customers accessing financing through the service will receive the amount requested in full with a repayment period of 30 days at five percent commodity Murabaha margin,” Safaricom noted in a statement.
Sharia-compliant loans do not include interest but financial institutions charge margins or profits. Murabaha refers to the financing model where the lender and borrower agree on a margin.
The five percent margin makes Halal Pesa a cheaper source of credit than M-Shwari – another Safaricom mobile loan product offered in partnership with NCBA Bank. Like M-Shwari, Halal Pesa will be accessible as a mini-app within M-Pesa.
M-Shwari charges borrowers a fee of 7.5 percent and 1.5 percent excise duty. It notably also includes features for saving unlike Halal Pesa which focuses on financing.
Gulf African Bank managing director Abdalla Abdulkhalik disclosed that uptake of M-Shwari among Muslims in Kenya had been low due to its non-compliance with Sharia financing rules.
“Our current strategy is focused on digitisation for financial inclusion. Our aim is to provide instantaneous access to interest-free credit through Halal Pesa,” he further noted.
Sourced from Business today