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FULIZA – Dissecting the Numbers - Standard Investment Bank

The recently published KCB Group Plc 1H19 results offered us a glimpse into the performance of the savings and loans products revenue line of Safaricom’s M-Pesa. More specifically, we managed to decipher possible revenues generated by the recently launched Fuliza product.

Fuliza is an M-Pesa overdraft facility launched in January 2019 that enables M-Pesa users to overdraw their accounts based on their credit limits. The overdrawn amount is auto-debited once the customer’s M-Pesa wallet is credited. CBA and KCB are the underwriters of the facility, with amounts disbursed by each pegged on the market share of their respective digital loans offering (Mshwari and KCB-Mpesa). In the six months to June 2019, KCB disbursed KES 27bn, suggesting that CBA would have extended KES 54bn bringing the total amount disbursed to KES 81bn.

The current revenue sharing formula for the Fuliza product is 40:40:20 for Safaricom, CBA and KCB respectively. KCB earned KES 484m in 1H19 in revenue from Fuliza, thus totalling KES 2.4bn for the entire product to end of June 2019, by our estimates.

Using the revenue sharing formula as a guide, Safaricom would have more than doubled the revenue earned q/q to KES 668m (calculated as KES 968m earned till end of June 2019, less KES 300m as at March 2019).


The table below shows our analysis of revenue derived from savings and loan products riding on M-Pesa (MShwari and KCB M-Pesa) which are registering an exponential growth – average growth rate of 17.1% over the last three years (2019 partially includes Fuliza services).

Though the amount earned by Safaricom from Fuliza might not seem to move the needle from a total revenue perspective, we expect savings & loan products riding on M-Pesa (Mshwari, KCB-Mpesa and Fuliza) and others yet to be consummated (deal with Equity Bank), to offer Safaricom a growth frontier to turbo-charge its top line for years to come.

Based on the current run rate and our estimates on costs and forward guidance provided by Safaricom’s management for FY20, we expect Fuliza to account for at least 25% of EBIT growth.