Fuliza is no different from gambling. It’s cartagorised as a loan. But it is not. It is slavery.
The only difference is that it’s automatically deducted the moment you deposit or receive money. It also has interest rates which are otherwise very extortive. Fuliza is NOT A lifesaver It’s an exorbitant form of theft. Here is how.
The biggest thing about Fuliza is the interest that it earns on the borrowed amount. What they avoid talking about at all costs because if Kenyans really knew what’s up they would avoid it like the plague. Let me break it down for you.
In the safcom website under FAQs for fuliza they have clearly indicated that you will be charged a one off interest rate of 1.083% and a daily administrative fee on the outstanding balance ranging from KES 2-30 for a limit of 0-70k
Those numbers don’t look bad right? WRONG!
Compare this with their other products like Mshwari that charge 7.5% standard fee(not revolving on outstanding balance like fuliza) which is essentially around 90% per year (still high but incomparable by a long shot)
And of course this real cost of debt is never mentioned much lest Kenyans know they are not paying that 1.083% or the 7.5% for fuliza. It’s bad for business duhhh. They choke it down to product differentiation but it’s purely extortionist. Safcom’s fuliza is no different from all these digital lending apps that are all over Kenya burdening the majority of Kenya’s poor with debt that can only be classified as slavery now. That’s why big papers like financial times call this ‘perpetual debt in the silicon savanna’
Safcom is essentially a telco that is now offering financial services but doesn’t want to be classified as such and can’t according to the law. Communications authority powers are limited to their communication services. So who going to check them or hold them accountable? It’s attractiveness and addictive ness comes from the fact that it is so easily accesible on your phone, it’s size and brand clout, lack of disclosure of the actual full interest in its terms and conditions(the 1.083% ni ya kufumba macho honestly). Who is foolong who?
You can’t be listed under CRB for not paying fuliza the way you would by banks and the digital mobile lending apps. They will just keep racking up your debt the more you don’t pay and it’s a classic debt trap.