According to reports, M-PESA and Pezesha, two Kenyan fintech companies, are teaming up to introduce Mkopo wa Pochi, a new credit facility that would let small business owners borrow money straight from their M-PESA business accounts. Mkopo wa Pochi, which will supplement Pochi la Biashara, Safaricom’s business wallet for small business owners, is already scheduled to be available through an upgrade to the M-PESA super app starting in June 2024. Mkopo wa Pochi makes use of both businesses’ advantages:

• 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.

Renowned for its credit relationships and proficiency in digital financing, Pezesha runs a marketplace for small business loans and has worked with regional firms like Marketforce, Kyosk App, and Rocket Health. Pezesha will use resources including credit bureaus that list loan defaulters to evaluate the creditworthiness of Pochi la Biashara consumers.

According to Safaricom’s terms and conditions page for the product, “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.”

The one-time access fee for Mkopo wa Pochi loans is 2.76% of the total amount borrowed. Tenants are given a seven-day term with a seven-day extension option. 3.85% is the one-time cost for extending the loan during the whole 14-day period. There is a 1% daily penalty for up to 7 days for late repayments. As per BitKE’s article in 2022, Pezesha raised $11 million in Series A funding to extend its operations in Africa, and among the investors was Input Output Global (IOG), the organization responsible for the Cardano blockchain. Through its collaboration with Cardano, Pezesha hopes to develop an African peer-to-peer financial operating system.