Equity Bank Kenya has taken a bold step in the financial landscape by launching ‘Boostika,’ an unsecured overdraft fuliza facility that enables customers to overdraw their accounts by up to Sh100,000 for various transactions, including shopping and mobile payments.
This move positions Equity Bank in direct competition with Safaricom’s Fuliza service.
Customers with active accounts for at least six months are eligible for overdrafts ranging from Sh100 to Sh100,000, based on their loan limit.
The ‘Boostika‘ facility allows clients to complete transactions even when their account balances are insufficient, with the obligation to repay the borrowed amount within a month, incurring an effective cost of credit at 8.5 percent.
The terms and conditions outline a transparent fee structure for ‘Boostika.’
Customers will face a five percent processing fee, 1.5 percent monthly interest, one percent loan insurance charge, and a 20 percent excise duty on the processing fee.
For instance, a customer utilizing the maximum Sh100,000 overdraft will incur an 8.5 percent interest rate, totaling Sh8,500, comprising a Sh5,000 processing fee, Sh1,500 interest, Sh1,000 loan insurance, and Sh1,000 excise duty.
Comparatively, a Sh70,000 ‘Boostika’ overdraft repaid after 30 days will cost the customer Sh5,950. In contrast, Safaricom’s Fuliza, which offers a similar maximum limit, imposes a Sh1,600 charge on the user.
This includes a one percent access fee (Sh700), a daily maintenance fee (Sh750), and a 20 percent excise duty on the maintenance fee (Sh150).
To access the ‘Boostika’ overdraft, Equity Bank customers can use Equitel, Equity Mobile App, or the *247# option for payments and transactions.
The convenience and accessibility of this service aim to attract Equity’s broad customer base already engaged in these platforms.
Equity Bank’s ‘Boostika’ introduces a competitive edge in the market, providing customers with an alternative financial solution that rivals existing offerings.
The battle for dominance in the overdraft market between Equity Bank and Safaricom’s Fuliza is poised to bring about innovative and customer-centric developments in Kenya’s financial sector.
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