The jump in the uptake of the loans emerged in a period when the economy shed more than two million jobs on the back of sluggish corporate earnings in the wake of Covid-19 economic hardships.

Fuliza is underwritten by KCB Group and NCBA Group, which already had partnerships with Safaricom to offer short-term loans on the M-Pesa platform. NCBA has said it lent Sh132 billion through Fuliza in the six months to June while KCB Group disclosed loans worth Sh44 billion on the overdraft feature.

Fuliza allows customers to complete M-Pesa transactions when they have insufficient funds.

The debt is recovered from M-Pesa balances automatically, but subscribers who do not settle their overdrafts within 30 days are barred from using their unused credit limit until they pay the outstanding amount.

Fuliza borrowing has been increasing especially after Safaricom decided to increase the minimum limit for borrowing M Shwari loans to Ksh 2,000. This transferred all M-Shwari borrowers seeking to borrow below Ksh 2,000 to the Fuliza lane.

The uptake of Fuliza deepened in a period that saw the economy shed 2.23 million jobs, ushering in reduced cash.

Workers on payroll or business dropped from a peak of 18.1 million in December to 15.87 million in June, reflecting significant business disruptions in the wake of the pandemic.

Young people were the hardest hit by job cuts compared to their counterparts aged above 35. These young people are the ones who are most hooked to these digital mobile lending platforms.