Equity Bank has introduced a real-time overdraft facility, allowing borrowers to access up to Sh100,000 in a move to compete with Safaricom’s Fuliza and Faraja products.
The aim is to enhance financial inclusivity and cater to the conventional market’s perceived high-risk appetite.
While specific terms and conditions for the new facility remain undisclosed, an insider has revealed that it offers a flexible repayment plan of up to 30 days. Borrowers can top up any amount between Sh100 and Sh100,000 and choose to repay the borrowed sum before the 30-day term concludes.
Equity Bank customers can access this service via the bank’s mobile app, Eqyitel line, or by dialing *247#. It supports transactions for Paybill, Till, and person-to-person payments.
This new credit product from Equity Bank is reminiscent of Safaricom’s Faraja, developed in partnership with EDOMx Ltd, a Kenyan financial technology firm. Faraja enables customers to make purchases ranging from Sh 20 to Sh 100,000 and complete payments within 30 days.
With this launch, Equity Bank is set to intensify the competition in the mobile overdraft market, posing a new challenge to Safaricom’s Fuliza.
Safaricom recently reported a 40% decrease in Fuliza earnings in its financial results for the first half of the year. This drop was attributed to the increased popularity of the government-backed Hustler Fund, which offers more affordable credit options.
The introduction of this innovative product by Equity Bank is expected to further reshape the mobile overdraft landscape, providing consumers with greater choice and flexibility in accessing short-term cr
