Africa-based telecommunication company Safaricom and US-based lending provider EDOMx have partnered to extend BNPL to Lipa Na M-PESA businesses. The newly introduced BNPL service made available via this partnership is called Faraja and it is extended to businesses that operate on Lipa Na M-PESA, a payment service that enables customers to make cashless payments for goods and services.

According to the official press release, Faraja seeks to enable businesses on Lipa Na M-PESA to accept zero deposit, zero interest 30-day credit for customers purchasing via the cashless payment service. The new BNPL service will be offered to customers who want to make purchases ranging from approximately USD 0.14 to USD 703 (or KES 20 to KES 100,000) at zero interest fee, provided the payment for the goods is made within 30 days. To access the service, customers can dial *799# to opt-in or make a payment, or by selecting the Faraja mini-app on the M-PESA Super App.

Customers have the option to buy multiple items at once through Faraja, on condition that they stay within their designated credit limits. The service is now available across all Naivas outlets, Goodlife pharmacies, and City Walk, amongst other merchants. From the businesses’ perspective, Safaricom will reportedly enable EDOMx to extend the Faraja service to more than 606,000 businesses at an agreed-upon facility fee, which is paid by the business.

The enterprises using Faraja will receive full payment for a product or service instantly when a customer makes a payment. Businesses on Lipa Na M-PESA can opt into Faraja through the designated portal at farajacredit.com or by contacting EDOMx. Faraja in the wider context When providing comments on the announcement, a representative from EDOMx emphasised that even though Faraja was launched in Kenya, the company’s focus is on the global market.

What is more, the official emphasised that products such as the new BNPL service promoted creativity in the digital financial ecosystem, thus achieving inclusivity and advancing the sector. As further outlined in his statement, the global digital financial landscape is currently undergoing a transformation. EDOMx is reportedly only at the beginning of its journey and has other upcoming offerings in the pipeline specifically catered to the Faraja community.

EDOMx’s partner in this joint venture is Safaricom, the company that runs M-PESA, the world’s first mobile money transfer system. When explaining Safaricom’s decision to partner with EDOMx in a bid to extend BNPL services, an official from the Africa-based telecommunication company pointed to the company’s desire to resolve a pain point in the market. According to the official's explanation, many businesses lose out on potential sales when customers show interest in making a purchase but don't have the funds available at that time.

Hence, Faraja comes as a solution to tackle this issue. .