The introduction of a Safaricom-backed zero-interest credit facility for the purchase of products was thwarted by the Central Bank of Kenya (CBK), derailling a product that was meant to upend the mobile loans industry.
According to three people with knowledge of the situation, hours before the intended debut, the CBK requested that the promoters of the interest-free product known as Faraja stop selling it.
Safaricom and Equity Bank are identified as partners in the financial technology company EDOMx Ltd., which owns the Faraja product.
According to media invites distributed to the media, the product was scheduled to launch on July 6 at 8 p.m. Safaricom had loaded the terms and conditions of the product that its users would use to shop for items worth up to Sh100,000 and pay later.
According to two people with knowledge of the situation who requested anonymity for fear of CBK retaliation, a call from the CBK did, however, arrive in the afternoon before the product’s introduction, with clear instructions that the product was under regulatory evaluation and pending approval.
Due to this, Safaricom hastily removed the terms and conditions for Faraja from its websites, forcing Edomx to cancel the launch.
According to the sources, the CBK granted the product conditional clearance, encouraging Safaricom and Edomx to choose a launch date.
“Faraja was to be offered by EDOMx in partnership with Safaricom and Equity Bank. As communicated by EDOMx, Farajas’s launch was postponed and a new date will be communicated in due course,” Safaricom said in response to inquiries on the postponement of the launch.
It is not yet clear why CBK made the decision to halt the product.
