Safaricom partners with Pezesha to launch Mkopo wa Pochi, a new credit service for small business owners via M-PESA

Safaricom, the leading mobile network operator in Kenya, has strategically partnered with Pezesha, a fintech company specializing in digital lending, to offer a new credit solution, Mkopo wa Pochi, aimed at supporting small business owners. This initiative is set to enhance Safaricom’s portfolio of loan products, which currently includes popular services like M-Shwari and Fuliza. Mkopo wa Pochi is designed to enable entrepreneurs to access loans directly through their M-PESA business accounts, providing them with much-needed financial flexibility.

The Mkopo wa Pochi service is now accessible via an update to Safaricom’s M-PESA super app, complementing the existing Pochi la Biashara service, which is a dedicated business wallet catering to the needs of small business operators.

This collaboration marks Pezesha’s entry into Kenya’s thriving mobile money sector through a partnership with Safaricom, granting Pezesha exposure to Safaricom’s extensive M-PESA user base, which boasts over 32.4 million active subscribers.

The synergy between Safaricom and Pezesha is evident in Mkopo wa Pochi’s offering. Safaricom’s Pochi la Biashara service already serves over 632,000 active merchants and has processed transactions worth approximately $564 million (KES 73 billion), generating around $6 million (KES 800 million) in revenue for Safaricom from March 2023 to March 2024. Pezesha brings to the table its specialized expertise in digital lending and a track record of successful credit partnerships with entities like Marketforce, Kyosk App, and Rocket Health.

Mkopo wa Pochi introduces a one-time access fee of 2.76% on the loan amount, with a repayment period of 7 days, extendable by another 7 days upon payment of a one-time extension fee of 3.85% for the full 14-day term. Late repayments will incur a daily penalty of 1% for up to 7 days.

Pezesha will utilize various tools, including credit bureaus, to evaluate the creditworthiness of Pochi la Biashara customers. Safaricom’s terms and conditions for the product indicate that Pezesha’s credit assessment may incorporate a range of data, such as the customer’s business transaction history with Safaricom, mobile money account activity, credit information from Credit Reference Bureaus, usage history of the product, and current market conditions.

In a significant boost to its capabilities, Pezesha secured a $500,000 grant from the U.S. International Development Finance Corporation (DFC) in May 2024 to enhance its credit scoring technology. This followed an $11 million pre-Series A funding round in 2022, which was led by Women’s World Banking Capital Partners II.