Strategic Alliances and Performance of Fuliza Ya Biashara Facility in Kenya

Abstract

Fuliza is a recent and notable example of a strategic alliance in the mobile banking industry. The partnership between Safaricom, NCBA and KCB Bank to launch Fuliza is an interesting case study because it leverages the strengths and capabilities of the firms to provide a unique and innovative mobile banking service. Studying the relationship between strategic alliances and performance in the context of Fuliza can provide insights into the factors that contribute to the success of strategic alliances. Given the significant impact of Fuliza on the mobile money industry in Kenya and the wider East African region, there is a need to understand the factors that contributed to its success, and how the strategic alliance between Safaricom, KCB and NCBA influenced its performance. The objective of this study was to establish the influence of strategic alliances on performance of Fuliza ya biashara facility in Kenya. The study was based on the resource-based view theory, transaction cost economics theory and agency theory. The research design was a case study which used primary data. The research instrument used to collect the data was an interview guide. This survey targeted three senior managers in charge of Fuliza la Biashara facility in Kenya namely; the Safaricom representative, NCBA representative, and KCB representative as the main respondents. The data obtained from the respondents was analyzed qualitatively by the use of content analysis. The study found out that The strategic alliance between Safaricom, NCBA Bank and KCB Bank has significantly influenced the performance of the Fuliza facility in terms of loan disbursements, revenue generation, and customer satisfaction. The collaboration between Safaricom and the banks has contributed to Fuliza's access to resources and capabilities that were not available internally. The resources identified were financial resources, risk management expertise, technology and infrastructure as well as regulatory compliance. Access to Banks’ credit scoring and risk management expertise has helped Safaricom to better assess and manage the risk of Fuliza users. Three partners manage the partnership to ensure alignment of interests and mutual benefits as well as the governance mechanisms or contractual arrangements are in place to mitigate potential conflicts and risks associated with the alliance. The study concluded the alliance has enhanced Fuliza ya Biashara Facility's innovation capabilities through increased investment in research and development, access to new technologies and expertise resulting to launching of new products and services. The study recommended that the three companies should leverage on each other's strengths and expertise. The three companies have complementary strengths and expertise that they could leverage to create a more powerful and effective Fuliza ya Biashara facility. The alliance has the capacity to use its combined influence in order to advocate for policies that foster financial inclusivity and facilitate the advancement of inventive financial offerings. As an instance, the alliance may propose advocating for the alleviation of certain constraints on mobile money transactions, therefore facilitating the accessibility of financial services for those residing in rural regions.