Safaricom PLC has launched Faraja an interest-free loan facility dubbed Faraja that enables consumers buy good and services up to ksh 100,000 on credit. This come after the Central bank of Kenya (CBK) accepted to clear Faraja as a digital credit provider with zero interest credit service.
How does it work?
Faraja is owned by a Fintech firm EDOMx Ltd as a digital credit facility with Safaricom and Equity PLC as their partners. In the new service, Equity PLC is expected to fund services used to settle the customers’ transactions through Safaricom’s Lipa na M-Pesa service.
On the other hand, EDOMx will then recover the money from the customer within a period of 30 days, that will be able to earn the difference between the discounted product prices and market rate costs.
Safaricom will earn its fees through Lipa na M-Pesa business till, charged at a maximum of 0.5 percent and not more than Sh200 per transaction while transaction of Ksh 200 and below will be free. Faraja is different from the current Safaricom Fuliza service in that, the facility offers zero rates and restricts money on credit being send to subscribers other than buying of goods and services through Lipa Na Mpesa options – Buy Goods (Till Number) and Paybill Number.
What if I default Faraja credit service?
Service defaulters will face the hiring of debt collectors while the Safaricom PLC Faraja account will be suspended and eventually closed.
Users of Faraja credit facility would access services from selected outlets like Naivas, Good Life Pharmacy and Citi Walk.
How to access loan from Faraja App
Users wishing to opt in the service must be an active Safaricom subscribers with an active Safaricom line and an individual’s credit rating.
Steps to access Faraja Credit facility in Kenya
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- Join Faraja Loan App by dialing *799#
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- Select the OPT-In option.
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- Enter your Safaricom M-Pesa PIN to get your Faraja Limit.
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- To pay a merchant, dial *799# and select Lipa na Mpesa – Buy Goods and Services or Paybill option.
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- Enter the amount you want to pay.
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- Enter your M-Pesa PIN to make a transaction.
Safaricom will send an SMS on the failure or success of your transaction.
How to pay back Faraja Loan?
Faraja loan repayment steps as below
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- Dial *799# from your Safaricom line.
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- Choose the transaction you want to pay, and press send.
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- Enter your MPESA PIN and press send.
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- Accept or decline the transaction.
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- Once accepted, you will get an SMS notification confirming the credit transaction details, the amount paid, and the new balance.
CONCLUSION
Having a variety of credit facilities in the economy not only offers consumer options, but they also get to improve their lives during the tough economy by acquiring items they would otherwise not have been able to afford.
