Monday, August 8, 2022 –Ex-Safaricom Chairman and CEO Michael Joseph has, for the first time, faulted the M-Pesa services in the country saying it deviated from its main reason.
Mr. Joseph who was speaking this in Nairobi on Sunday August 7, revealed that when M-pesa was launched in Kenya, it was supposed to boot the savings culture among customers but, unfortunately, along the way, Safaricom tested the value of lending and the profits were attractive.
Safaricom boasts of market-leading mobile loan services in M-Shwari, Fuliza and KCB M-Pesa all which have previously come under pressure over their exploitative nature.
For instance, their recently launched Fuliza product charges sh 2 for every sh 100 and sh 30 per day for sh 2500. This therefore, makes M-Pesa products an exploitative loan facilities.
Joseph – former CEO – was the pioneer when this M-Pesa product was started at Safaricom and explains that his vision was purely to focus on driving savings, but as usual, corporate interest will always supersede everything else.
“I really wanted M-Pesa to have much more impact on people’s lives in terms of savings. Unfortunately, because the financial rewards if you lend money are much higher it became [more of] a lending product than a saving product. This lending culture in Kenya is very bad for our country. It will take time to change this,” he revealed to a local channel.
Joseph added that he could have been very happy if the main agenda remained on savings but this diversification to lending was also inevitable for business reasons.
Recently, Safaricom’s new product Faraja, which could allow clients to settle goods and services from a range of business, was in July halted by the regulator CBK. This product was to offer what was described as interest-free Lipa na M-Pesa loans.