When is Mobile Money Not a Bank? When it is M-Pesa
East Africa’s leading telecommunications company Safaricom is in trouble, with 2 major lawsuits from customers now demanding accountability. The company has in the past few months faced renewed criticism over the credibility of its mobile overdraft facility Fuliza, which runs on its mobile money service M-Pesa, and rising cases of SIM swap fraud targeting Fuliza limits. Three Kenyan M-Pesa users have filed a class-action suit against Safaricom, arguing that Kenya’s most profitable company uses its customers’ money to engage in profit-making financial lending services without consent, and without being registered as a bank. This is in contravention of section 2 (1) of the country’s Banking Act. They say that in spite of making profit through its 15-year partnership with the country’s KCB and NCBA commercial banks to offer lending services, Safaricom is yet to pay any interest to its more than 32m M-Pesa account holders, whose money “it uses to lend and earn profits.”
Become a member
Join the Ecommerce Forum South Africa and benefit from industry insights in South Africa and Africa.
Sign up to newsletter
Sign up to our newsletter and stay informed of the progress we are making at the Ecommerce Forum South Africa with government during Coronavirus.