Safaricom to remove 4 million customers from CRB, grant them access to new loans - Ndegwa

Safaricom CEO Peter Ndegwa now says that the telecommunications company is seeking to remove about four million customers currently blacklisted by the Credit Reference Bureau (CRB) by next month.

Speaking on Citizen TV’s News Night show on Tuesday, Ndegwa said Safaricom is currently liaising with KCB Bank together with NCBA to facilitate the move, which aims at increasing revenue collection by enlarging the customer margin.

“Today we have reduced Fuliza costs by 50 per cent on average. We are also working with NCBA and KCB as our banking partners, and they are going to be repairing four million customers that were previously listed on the CRB,” Ndegwa stated.

“We will be taking them off the listing in the CRB so that they are able to access new loans; it will be 4 million additional new customers who will be free to access Fuliza and other lending products out there…the repair will happen from November.”

Despite noting that the move may result in losses, the Safaricom boss argued that scrapping off the customers from the credit listing will mean that they will be allowed to re-borrow, hence increasing the use of Fuliza and other money lending services.

This, he explained, will eventually lead to a direct increase in customers thus ultimately recovering the revenue lost.

“Yes, Safaricom and banks will lose a lot of money, and a reduction in the revenue that we earn. Since we reduced the cost, we have seen an increase in numbers using Fuliza, more frequency of customers using Fuliza and higher amounts using Fuliza,” he stated.

“We expect over time the revenue will be recovered through the additional usage by customers. We believe that if the product is more sustainable and affordable, it will be better for the future of this product and its customers.”

On why the company cut the Fuliza costs, Ndegwa underscored that it was focused on the long-term goal of increasing the customer base, which means more subscriptions to the product and more revenue.

He further noted that customer demands called for cheaper and affordable interest on loans and therefore the company wanted to satisfy the needs of the public by serving its purpose as an emergency creditor.

“Fuliza is used by 7 out of 10 if not mor of our customer base across the country; certainly anyone you see on the streets would have used Fuliza at one point or the other,” he said.

“We were cautious that there were complaints about the level of cost of Fuliza and also how Fuliza is used; sometimes people extend Fuliza. It is supposed to be used as an emergency credit for a few days. If used for a few days, it is fairly affordable.”

He added: “What we did is to restructure the cost so that the first three days especially for those Fuliza limits below Ksh.1,000 it is free, and thereafter you’re charged a daily maintenance fee. If a customer pays within 4 or 5 days, then Fuliza will be one of the most affordable overdraft facilities.”