Pesa Pulse

Many Kenyans find themselves caught in the cycle of mobile lending traps. Fuliza overdrafts and M-Shwari loans offer quick access to cash, but their costs add up fast when balances linger. Fuliza applies a one-off access fee of one percent plus daily maintenance charges that vary by amount, often ranging from a few shillings to tens per day after any grace period. These accumulate quickly, creating effective rates that feel punishing over weeks or months. M-Shwari loans carry a facility fee around seven point five percent per loan disbursed, plus excise duty, repayable within thirty days, with rollovers adding more fees.

The traditional debt snowball method starts with smallest balances first for quick wins and motivation. In Kenyan mobile debt reality, this approach needs adjustment. Fuliza stands out because any incoming funds to M-Pesa get deducted automatically toward the outstanding balance plus fees. This automatic recovery makes it behave differently from M-Shwari, where repayment requires manual action or deductions from linked savings.

Prioritizing high-interest debt first, known as the avalanche method, mathematically saves more money. However, when Fuliza is involved alongside multiple M-Shwari facilities, a hybrid approach delivers better real-world results for most people in Nairobi or other parts of Kenya facing daily pressures.

First list all debts clearly. Note each Fuliza balance, since it accrues daily, and every M-Shwari loan with its principal, fee already charged, and due date. Fuliza often carries the highest ongoing cost due to daily fees that compound the longer it stays unpaid. M-Shwari fees are front-loaded but fixed per loan cycle.

Target Fuliza aggressively as the top priority in most cases. Deposit even small amounts regularly into M-Pesa to chip away at it automatically. This stops the daily bleeding faster than focusing on a larger M-Shwari balance. Once Fuliza reaches zero or near zero, the psychological relief is immediate since M-Pesa stops auto-deducting every incoming shilling.

Next shift extra payments to the M-Shwari loan with the soonest due date or highest relative fee impact. Make minimum payments on others to avoid rollovers or CRB issues. Rollovers on M-Shwari add another seven point five percent fee, pushing costs higher.

Build momentum with these steps. Create a strict monthly budget that directs a fixed portion of income or business sales toward debt repayment. Cut non-essential spending like frequent nyama choma outings or airtime bundles beyond basics. Side hustles, such as weekend matatu rides or selling items online, can generate targeted extra funds.

Automate where possible. Set reminders for manual M-Shwari payments to prevent extensions. For Fuliza, aim to repay within the initial grace days if any apply, or as soon as possible to minimize daily charges.

Track progress weekly. Use a simple notebook or phone note to mark reductions. Celebrate small milestones, like clearing one Fuliza instance or one M-Shwari loan, with something affordable like a home-cooked treat.

Avoid new borrowing during payoff. Opt out of Fuliza temporarily if discipline slips, though many find keeping it active but unused helps in emergencies after debts clear.

This tailored snowball starts with the relentless daily cost of Fuliza, then rolls into M-Shwari debts by urgency or size. It combines mathematical sense with the motivation needed when multiple apps and auto-deductions create stress. Consistency turns the trap into freedom, one cleared balance at a time.

Real stories from borrowers show that focusing on Fuliza first often frees up cash flow within weeks, making subsequent M-Shwari payoffs feel achievable. The key remains discipline plus small, regular actions over waiting for large windfalls.

Once debts reduce, build an emergency fund in a regular savings account or M-Shwari lock savings to avoid future reliance on overdrafts. This method works because it addresses the unique mechanics of Kenyan mobile lending while keeping motivation high through visible progress.