Dou You Use Mpesa (Hey, We know you do!!).. Here are the Unforeseen Consequences of Safaricom’s Overdraft Facility, Fuliza

Aside

A couple of weeks ago, telco Safaricom released an overdraft facility referred to as Fuliza. Owing to the carrier’s vast reach and robust marketing power, the product has been adopted by many (we do not have the number yet, but it is likely current users are in terms of millions as it attracted 1 million people on its first week), and has in the process allowed M-PESA users access services (PayBill, Send Money and Buy Goods) in cases where they run short of e-money. To date, the product, which Safaricom insists is not a loan facility (well, users cannot overdraw the funds to their wallets, unless they send the cash to another party and make an exchange), commands billions of shillings in disbursements.

Fuliza’s bells and whistles have unfortunately been plagued by unforeseen consequences for folks who regularly use M-PESA services (doesn’t everybody use the mobile money product on the daily though?), a development that has seen users take drastic measures to ensure that any funds that go through their M-PESA wallets are not used to regularize the facility. Would have the measures been avoided by using other services, like taking a loan from a friend? Sure. But at what cost owing to the fact that people only use Fuliza if other options are not viable? Well, let’s dig in.

M-PESA recipients are issuing warnings before receiving funds

You and I, or a person close to us has at one time warned that their M-PESA wallet has Fuliza, and cannot receive funds intended for a given task/project/payment. Let’s be open about this because the frequency at which these warnings are given is growing day by day, and does not appear to slow down as more people learn about Fuliza, and our inherent addiction to similar services such as online loans. The outcome? Well, the culprits are using their neighbour’s devices to receive funds, and where the person next to you has a Fuliza ‘loan’…

People are purchasing new SIM cards

This is may not be as frequent, but I know a couple of folks who have two or more SIM cards or have purchased another one to avoid the Fuliza regularization net. The purchase is obviously necessitated by the need to avoid refunding their Fuliza expenditure due to other more pressing matters. Understandably, these hide and seek games are unavoidable because unlike loan services, any money sent/deposited in your overdrawn wallet will regularize Fuliza (if it is less than the amount overdrawn) or pay it fully plus the interest. This was purposely done to qualify Fuliza ‘a not a loan’product; loans are flexible as you can pay them at the time agreed upon by the lender, save online microloans offered by the likes of Equity Bank that are serviced as soon as you deposit funds in your account (without you authorizing the payments).

People are wiping dust off their secondary mobile money services (T-Kash, Airtel Money, PesaLink, Equitel)

Maybe you have not redirected your mobile money services to the likes of T-Kash or Equitel or the Airtel Money, but I know I have because at one time, yours truly was not ready to pay what he owed to Fuliza for obvious reasons. T-Kash, for instance, coexists with M-PESA; the products charge the same fees for multiplatform transactions, which comes in handy for recipients who are wary of the associated transaction fees.

Can this development grow the revenues of other mobile money products? Probably not, but it the limitations of Fuliza has forced some people to explore other solutions. We are not sure if the revenues Safaricom makes from Fuliza surpass the ‘insignificant’ exodus to competing mobile money services to make the telco brush off the introduction of a structured payment model.

Funds wrongfully sent to overdrawn accounts will not be reversed

It is worth noting that Fuliza is regularized as soon as an M-PESA account is replenished with funds. This implies that should you send money to a wrong number (that has been overdrawn), then you cannot get those funds back unless the recipient clears the facility and hopefully refunds the cash wrongfully sent to them. This, however, does not solve the inconvenience therein, and in some cases, recipients can disappear into thin air and there is nothing you can do about it unless you involve the Police.

Bottom line

No one is in a position to advise you against using Fuliza because in most cases, it comes in handy in addressing emergencies. However, we need to be wary of its unforeseen consequences, which can limit your ability to use mobile money services. Of course, if you can furnish the overdraft in a timely manner, then go ahead and help yourself out. Contrastingly, you may need to think twice before Fuliza-ing because non-payment comes at a much bigger cost.

 

5 Great Tips For Achieving Financial Security

Although the actual definition of ‘going broke’ may be fluid at best, it is a well documented fact that even multimillionaires sometimes stumble into rough financial times, just like normal folks. It gets especially bad when that happens during old age when opportunities to redeem oneself are hard to come by.
With globalization and the cyclic nature of the economy nowadays, financial security has been elusive for the majority. You can have a well paying job today and lose it tomorrow just because your employer decides outsourcing overseas is cool. It is therefore important to take steps early enough to cushion oneself from potential future financial upheavals. Below are some smart strategies you can use to secure your financial future.
1.Balance your Life
A lot of people out there equate frugality and intensive saving culture to automatic financial security. This is however far from the truth. In order to achieve the ultimate goal of life, which has been described as ‘the pursuit of happiness’ and financial freedom in numerous quarters, you need to balance your life. That means taking the time to enjoy what today has to offer such as your family, friends and a career – while not compromising future possibilities. You therefore need to establish clear boundaries to limit yourself from over indulgence.
2.Invest in Yourself
The one asset that is almost impenetrable to external factors is the set of knowledge and skills that you learn during your lifetime. It is therefore important to invest in skills that will make you more marketable and increase your future earning power. It is never too late to acquire a new skill and luckily, the digital world has provided us with numerous portals where we can learn income generating activities. Investing in oneself also means maintaining a healthy lifestyle by eating well and engaging in regular exercises. It would be pointless to have a lot of money and not being able to enjoy because of poor health.
3. Have multiple revenue streams
The baby boomer generation had it going well in the past as most of them could fully count on their salaries to sustain their daily living expenses and have some funds left for retirement planning. The reality the millenials now face is that careers are not secure and the cost of living has skyrocketed. It is therefore important to establish a side hustle that can help you generate extra income to supplement your salary. There are numerous opportunities online, from forex trading to part time online jobs. Sometimes these side jobs can end up being so successful and you may want to abandon the conventional job to focus on them. You should be careful though that you channel your earnings to meaningful long-term investments to secure your financial future.
One can also invest in Agribusiness, which is an area where Ushindibora has been helping its members with financial as well as technical skills to get them started. You can reach us here for further details on this.
4. Living within your means
This may sound like an ‘old folks saying’ but its application is timeless. A lot of people today are tempted to max out their credit cards and other facilities ostensibly to spend on luxuries they don’t really need. The rule of the thumb is if you can do without it and it does not add value to your net-worth, don’t borrow to acquire it. Save and be patient – you will be able to afford the item in the near future.
5. Plan and take calculated risks
In case you find yourself in a sudden financial quagmire, you can count on Ushindibora for short-term loans to get you back on your feet. Check out our M-Ushindi loan facility to find out how it works.
Ultimately though, the most successful people in life are those who take a certain amount of calculated risks. Understand how to navigate the financial world and learn how to invest in the stock market or the many other avenues available. Your funds should always be out there working for you. In all these, it is prudent to involve our professional financial advisors every step of your way.

 

M-Ushindi, the Universal mobile loan service

Every one of us has at some point found themselves in need of a quick loan to sort out some urgent matters. You could be in a situation where you are unable to access banking services for one reason or the other. There is also the arduous task of providing some form of security – which happens to be one of the key requirements that most financial institutions demand before allowing you access to loan facilities.
Ushindi Bora has come up with a mobile based solution, M-Ushindi, tailored to offer instant loans to its members whenever they are in need. You may be wondering what makes this product any different from tens of other loan applications currently available in the market. Here is what you need to know;
Universal application
Unlike many other mobile based loan applications, M-Ushindi utilizes USSD access therefore allowing members who do not own smartphones to apply for loans. One does not need to download anything, just a quick dial of *261*11# and you’ll be presented with all the options you require.
Good repayment terms
Those of us who’ve had the unfortunate experience of dealing with loan sharks know just how ruthless they are when it comes to repayments. You can lose the item you provided as security not mentioning the exorbitant interest rates they charge on micro-loans. M-Ushindi does not require members to deposit any security and you are allowed a period of upto 30 days to repay your loan.
Easy to use
Any Ushindi Bora member who can dial *261*11# from any working mobile phone can access the loan facility. You don’t need any technical expertise or an advance mobile phone to enjoy the service.
Instant approval
As long as you’re a registered Ushindi Bora member with a good saving history you can access loans of up to Ksh 70,000 sent to you instantly to your Mpesa account. Since we already have your details as a member, you’re not required to fill lengthy questionnaires before gaining approval.

For non-members, click here and register with us so as to enjoy this Service!!