LAUNCH | M-PESA and Pezesha Launch Mkopo Wa Pochi Lending Service for Small Businesses in Kenya

Kenyan fintechs, M-PESA and Pezesha, are reportedly coming together to launch Mkopo wa Pochi, a new credit service which will allow small business owners to borrow money directly through their M-PESA business accounts.

Mkopo wa Pochi is already said to be available through an update to Safaricom’s M-PESA super app from June 2024, and it will complement Pochi la Biashara, Safaricom’s business wallet for small business owners.

Mkopo wa Pochi leverages the strengths of both companies:

• Safaricom’s Pochi la Biashara, which has over 632,000 active merchants, processed $564 million (KES 73 billion) in transactions and generated $6 million (KES 800 million) in revenue for the operator between March 2023 and March 2024.
• Pezesha, on its part, is a digital lending infrastructure and platform that provides credit financing solutions to medium, small, and micro enterprises startups (MSMEs) in Kenya, Uganda, Ghana and Rwanda.

Pezesha, which operates a digital lending marketplace for small businesses, is renowned for its credit partnerships and digital lending expertise and has collaborated with local companies Marketforce, Kyosk App, and Rocket Health.

Pezesha will assess Pochi la Biashara customers’ creditworthiness using tools like credit bureaus that list loan defaulters.

“Pezesha may make a credit assessment after considering information from various sources, including but not limited to, your business transaction history with Safaricom, your mobile money account transaction history, your credit information from the Credit Reference Bureau, your history of use of the product and prevailing market conditions,” Safaricom says in the product’s terms and conditions page.

Mkopo wa Pochi loans come with a one-time access fee of 2.76% on the borrowed amount. Borrowers have a 7-day term with an optional 7-day extension. Extending the loan incurs a one-time fee of 3.85% for the entire 14-day period, and late repayments are subject to a 1% daily penalty for up to 7 days.

In 2022, as reported by BitKE, Input Output Global (IOG), the company behind the Cardano blockchain, invested in Pezesha as part of a list of investors which saw the company raise $11 million in Series A to expand its operations in Africa. Pezesha’s partnership with Cardano is expected to see the company build a peer-to-peer financial operating system in Africa.