Safaricom CEO Peter Ndegwa has today revealed that the telecommunications company is set to delist four million subscribers registered by the Credit Bureau (CRB) next month.
Speaking on Citizen TV's News Night show on Tuesday, Ndegwa said Safaricom is currently tying up with KCB Bank and NCBA to facilitate the move, which aims to increase revenue collection by expanding its customer base.
"Today, we have reduced Fuliza fees by an average of 50 percent. We are also working with NCBA and KCB as our banking partners to rehabilitate the four million customers who were previously registered with CRB," said Ndegwa.
"We will remove them from the CRB list so that they can receive new loans; There will be 4 million additional new customers who will have free access to FuFultznd other credit products ... renovations will begin in November."
While noting that the move could lead to losses, the Safaricom boss argued that removing customers from the credit list would allow them to borrow again, thereby increasing the use of Fuliza and other mon money-lending voices.
This, he explained, will ultimately lead to a direct increase in customers and eventually offset lost income.
"Yes, Safaricom and the bank will lose a lot of money and our profits will decrease. "After we cut costs, we saw an increase in the number of people using Fuliza, the frequency of customers using Fuliza, and the number of people using Fuliza," he said.
"In time, we hope that the income will recover with additional use by customers. We believe that if the product is more stable and the price, it will be better for the future of the product and its customers."
In why the company is reducing the cost of Fuliza, Ndegwa indicated its long-term goal is to increase its customer base and get more subscriptions to the product.
He further said that consumer demand demands low and low into low-interest loans, so the company wants to meet the needs of the people by serving its purpose as an emergency lender.
"Fuliza is used by 7 out of 10 of our customers across the country; Surely everyone you see on the streets will use Fuliza at some point," he said.
"We are concerned that there are complaints about the price level of Fuliza and the use of Fuliza; sometimes people stretch Fuliza. It should be used as an emergency loan for a few days. It is very cheap to use for a few days."
He further added: "What we have done is to restructure the fees to be free for the first three days, especially for the Fuliza limit below Ksh.1,000, and after that, we charge a daily maintenance fee. If the customer pays in 4 or 5 days, Fuliza will be one of the most convenient overdraft facilities."
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