Safaricom and Huawei won this year’s “The Business of Tomorrow” award at the AfricaCom event. The annual event is considered the largest of its kind in the continent. It brings together leading companies in the media, telecommunication, and technology sectors.
This year’s event was held in Cape Town from November 12-14. The trade fair doubles up as an opportunity for innovators to showcase their products. It is also an opportunity for business owners in the tech world to connect and build relationships.
In January 2019, Safaricom partnered with the Chinese tech company, Huawei to launch the Fuliza service. Fuliza is an overdraft service on the mobile money platform, Mpesa. Registered Mpesa customers can borrow money and complete transactions above their account balances.
The innovative service solves the challenge of insufficient funds that Mpesa customers face when doing business via the service. The mobile money service has maintained its lead in the market since its launch. Safaricom’s competitors are far from catching up with the popularity of Mpesa.
Read Also: The Success of Mpesa in Kenya
The success of the Fuliza service is an indication of the need for such services in the Kenyan market. Within the first six months, Mpesa customers had borrowed 81 billion Kenyan shillings via the service. Kenyans are still in need of affordable and accessible loan services to do business.
Prior to Fuliza, Safaricom introduced the Mswari and KCB-Mpesa services for its customers. Both services use the customer’s Mpesa transactions data to determine loan limits. High values of Mpesa transactions enable customers to access higher amounts.
The telecom company has used the same strategy with Fuliza. Safaricom is working with the KCB Group and Commercial Bank of Africa to provide the overdraft service. When a customer borrows funds, the amount is sent to their Mpesa accounts.
Safaricom’s CEO Michael Joseph attributed the success of Fuliza to the significant role that Mpesa plays in the country. Mpesa has expanded and deepened financial inclusion, especially of low-income earners.
With the mobile money service, all customers can access loan services without depending directly on banks. The CEO further stated that Fuliza is one way of fulfilling the promise that the Company makes to provide relevant products and services.
The 26 million-plus subscribers is a clear sign that the service is relevant to Safaricom customers. The number of customers continues to rise despite competition from other telecom companies such as Airtel and Telcom.
The Need for Partnership
Huawei brings in the technology that enables Safaricom to offer the overdraft service. The Chinese giant has an overdraft platform that powers the design and development of financial products such as Fuliza.
Through the platform, Huawei provides secure and stable overdraft services. Security is a major concern for such services that involve millions of transactions and variant payment schedules.
Speaking about winning the prestigious award, David Chen, Huawei’s Director of Marketing and Solution Sales emphasized the need for security. David pointed to a business commitment that software companies in Nairobi, Kenya can borrow.
David indicated that Huawei combines security and stability in all its application programming for financial services. The technology behind Fuliza combines a world-class API with a secure platform for Mpesa users to access additional funds.
Despite the challenges in the global market, Huawei has made history in launching its innovative mobile phones. In September 2019, Huawei launched the Mate 30 series of smartphones without Google services.
The Company responded to the US ban with a series of prestigious smartphones with its operating system. In addition, Huawei showcased its 5G technology at the AfricaCom event. Such technologies have contributed to the digital transformation that the world is witnessing.
Fuliza is one of the engagements that Safaricom has had with Huawei. The two companies have worked together over the years to improve Safaricom’s financial services. The innovative loan services do not only target individuals but SMEs.
While services such as Fuliza attract millions of individuals, the companies work together with macro benefits in mind. Consider the number of businesses in Kenya and beyond that depend on Mpesa to complete transactions.
Product Development and Diversification
The partnership between Safaricom and Huawei is the first lesson for entrepreneurs in Kenya. Companies can achieve more through collaboration. The second lesson is about product development and diversification.
Safaricom officially launched the Mpesa service in 2007 after years of research on the possibility of money transfer through mobile phones. The service has set the pace for other countries.
Despite the success of the transfer service, Safaricom has continued to develop the services. The loan services started with a partnership with banks. Today, it is hard to come across an established business in Kenya without the Mpesa payment service.
Kenyans pay most of their monthly utilities via Mpesa. Should we mention the contribution of Mpesa to the popularity of betting platforms in Kenya? Yet, even with the successes in the past, the management is still exploring new services like Fuliza.
Recently, Safaricom introduced data and airtime with no expiry date. The moves are great lessons for business owners to keep innovating their products. Safaricom enjoys the largest market share yet the company never stops rebranding and improving its products.
With over 33 million subscribers, it is easy for a company to settle and cash in the profits. However, the management keeps pushing to increase the market share and reach new markets.
Huawei on its part has expanded its technologies and products to the entire globe. The Chinese brand has had its share of challenges but its products and services are still penetrating new markets.
Safaricom’s success with the Fuliza service shows that Kenyans are still looking for affordable loan services. The service offers an alternative to the now popular instant loan apps. The partnership with Huawei is good but a challenge to software companies in Nairobi, Kenya. We need to improve our creativity and innovation to provide similar or even better financial platforms. Fuliza is a first in Kenya. Developers should be thinking of similar or even better platforms for other telecom companies.