Safaricom To Use Auctioneers Against Mobile Loan Defaulters
Safaricom will soon come for your property for defaulting loans acquired through the telcos credit products; Fuliza, M-Shwari, KCB-Mpesa, and the latest product Faraja.
Faraja was recently launched by Safaricom in partnership with Equity Bank. The new product is a zero-interest credit service that will see customers shop for goods from as little as Sh200 to a maximum of 100,000 and pay back the exact amount without extra fees as it is with other credit products in the market.
Working in conjunction with various supermarkets, shops, and pharmacies, customers will use Faraja as a digital credit to make purchases depending on their individual credit scores and repay within 30 days. “You will only be required to repay the outstanding facility amount as advanced to you by us (in whole or in part) using the designated Paybill number or such other channels as provided by us from time to time,” stated Safaricom
Debt defaulters in Kenya are often threatened, blacklisted, and deprived of telco privileges, but that still does not refrain them from defaulting loans. The telecommunication company also depends on the Credit Recovery Bureau (CRB) to recover unpaid loans and curb defaults.
Safaricom has officially stated that it will now involve debt collectors in the newest mobile loan product Faraja. This move to involve debt collectors will also extend to other products; KCB-Mpesa, Fuliza, and M-Shwari.
“At any time after an event of default has occurred which is continuing, we may, without prejudice to any other right or remedy granted to us under any law… take reasonable measures including engaging an independent debt-collection agency, to recover the amount in default (and/or) submit information concerning the event of default to Credit Reference Bureaus, subject to applicable laws,” the telco says in a statement.
Safaricom, just like other credit products; Tala, Branch, and Zenka have fallen victim to defaulters who find it easy to shan payments of mobile loans due to the nature of virtual agreements. The move will set up thousands if not millions of loan defaulters across the country.
The findings of a recent household survey by the Central Bank of Kenya (CBK), FSD Kenya, and the Kenya National Bureau of Statistics (KNBS) show that 50.9 percent of the respondents have defaulted on mobile loans.