Savings –Ex-Safaricom Chairman and CEO Michael Joseph has faulted the M-Pesa services in the country saying it sadly lost its main purpose.
Joseph who was speaking this in Nairobi on Sunday August 7 noted that when M-pesa was first launched in the country, it was supposed to boot saving culture among users but, unfortunately, along the way, Safaricom tested the value of lending and the profits were attractive.
Safaricom boasts of market-leading mobile loan services in M-Shwari, Fuliza and KCB M-Pesa and has previously come under sharp criticism over the operations and terms of the services.
For example, their recently launched Fuliza product charges sh 2 for every sh 100 and sh 30 per day for sh 2500. This therefore, makes M-Pesa products an exploitative loan facility.
Michael Joseph – former CEO – was the pioneer when this M-Pesa product was started at Safaricom and explains that his vision was purely to focus on driving savings, but as usual, corporate interest supersedes always; hence the lending services.
“I really wanted M-Pesa to have much more impact on people’s lives in terms of savings. Unfortunately, because the financial rewards if you lend money are much higher it became [more of]a lending product than a saving product. This lending culture in Kenya is very bad for our country. It will take time to change this,” he revealed to a local channel.
Joseph added that he could have been very happy if the main agenda remained on savings but this expansion to lending trade was also inevitable on their part.
“I wanted people to save for the future instead of borrowing for funerals or weddings or school fees. Unfortunately, because you (telcos and banks) make more money when you lend people more money, it became a lending product…In my personal view, some of the things we are doing with M-Pesa, like borrowing, are not good for the people,” Joseph stated.
Safaricom’s new product, Faraja, was in July halted by the regulator CBK. This product was to offer what was described as interest-free Lipa na M-Pesa loans which would allow clients to settle goods and services from a range of business.
