M-Pesa users who default on their Fuliza loans, their funds in M-Shwari and KCB M-Pesa accounts would be frozen or utilized to pay off their outstanding debt.
According to a modification to the terms and conditions, Safaricom will have the authority to keep users’ funds on the two mobile money accounts if they default on the overdraft option.
Users’ cash in M-Shwari and KCB M-Pesa may be held as collateral and security for any Fuliza loans that are outstanding, according to the revised provisions.
In addition, the new terms charge Fuliza a 1.083 percent interest rate, whereas the service previously charged a facility fee of the same amount.
The modified conditions, according to Safaricom, are not new, but rather a standard for financial products.
In response to questions, Dennis Mbuvi, a communication officer at Safaricom, said the new conditions explain the fact that Fuliza is given across various M-Pesa products.
“As a financial service, Fuliza is offered by KCB and NCBA as licensed by the Central Bank of Kenya (CBK) hence the lien clause which is standard for banking products and also there in the current terms,” he added.
