This initiative aims to bridge the financing gap for informal small and medium-sized enterprises (MSMEs), which often struggle to secure loans from traditional institutions.

Over 600,000 Pochi La Biashara users can now access these micro-loans directly through their M-Pesa business accounts.

The loans come with a one-time access fee of 2.76% and a seven-day repayment term with a single, optional fourteen-day extension incurring an additional fee.

“This partnership empowers small business owners by providing them with convenient access to capital to run their businesses,” said a Safaricom spokesperson. “The ability to separate business and personal finances through Pochi La Biashara makes managing these loans even more efficient.”

Pezesha’s expertise in credit management will be used to assess borrowers’ creditworthiness and deter defaults through collaboration with credit bureaus.

This collaboration strengthens Pezesha’s position in the credit management market, having already supported over 50,000 MSMEs.

“Mkopo Wa Pochi,” as the new service is called, complements Safaricom’s existing M-Shwari and Fuliza offerings, further solidifying their role in providing accessible financial solutions to Kenyans. The success of these mobile loan products has spurred the growth of lending apps and mobile loan options from traditional banks.

The easy accessibility and short repayment terms of these micro-loans cater specifically to the needs of small businesses that require smaller amounts for short-term needs like restocking inventory.

The rise of mobile phone penetration and technological advancements have made these financial services not only lucrative but also convenient for a wider range of entrepreneurs.