East Africa’s leading telecommunications company Safaricom is in trouble. Pressure is mounting on it, with two major lawsuits from its customers now demanding accountability from the telco giant. The Nairobi-based firm has in the past few months faced renewed criticism over the credibility of its mobile overdraft facility Fuliza, which runs on the popular 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, despite it not 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 32 million M-Pesa account holders, whose money “it uses to lend and earn profits.”
Safaricom has Been Sued for Using Customer Money to Lend Out as Overdrafts
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