M-PESA itself is halal: depositing, sending, paying a till or paybill and withdrawing at an agent are services bought for a fixed fee, Safaricom pays nothing on the wallet balance, and nothing in the core product involves a loan or interest. The problems sit in the menu around it. M-Shwari pays interest of 2% to 5% a year on savings and charges a 7.5% facility fee on loans; the conventional Ziidi money market fund invests in Treasury bills and interest-earning accounts; Fuliza is an overdraft with a daily charge. Ziidi Shari'ah, managed by GulfCap Investment Bank under a Shari'ah board, is the halal savings option inside the same app. Lipa Mdogo Mdogo is an instalment phone purchase whose published terms call it a loan, and it needs a closer look.
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What M-PESA actually is, and why the wallet is permissible
M-PESA is an electronic value account tied to a Safaricom line. You deposit cash with an agent, hold value, send it to another number, pay merchants and bills, and withdraw. Safaricom's tariff page, updated 4 August 2026, lists a maximum balance of KES 500,000, a daily transaction limit of KES 500,000 and a per-transaction cap of KES 250,000. The wallet pays no return. That matters for the Shari'ah analysis: a Muslim holding KES 20,000 in M-PESA is holding a non-remunerated balance with a payment provider, which is a form of amanah or qard without increase, and there is no riba on the holder's side.
The fees are an ujrah, a charge for a service rendered, fixed at the moment of the transaction and unrelated to any debt or passage of time. Sending KES 101 to 500 costs KES 7, KES 501 to 1,000 costs KES 13, KES 1,501 to 2,500 costs KES 33 and anything from KES 20,001 to 250,000 costs KES 108; sending KES 1 to 100 is free. Withdrawing at an agent costs KES 11 for KES 50 to 100, KES 29 for KES 101 to 2,500 and KES 309 for KES 50,001 to 250,000. Safaricom's own FAQ notes that excise duty on these fees rose from 12% to 15% under the Finance Act 2023. None of this is interest. Our is it halal hub covers the general test; the rest of this article applies it to each M-PESA add-on.
| Transaction (KES) | Send to M-PESA user | Withdraw at agent |
|---|---|---|
| 1 to 100 | Free | KES 11 (from KES 50) |
| 101 to 500 | KES 7 | KES 29 |
| 501 to 1,000 | KES 13 | KES 29 |
| 1,501 to 2,500 | KES 33 | KES 29 |
| 5,001 to 7,500 | KES 78 | KES 87 |
| 10,001 to 15,000 | KES 100 | KES 167 |
| 20,001 to 35,000 | KES 108 | KES 197 |
| 50,001 to 250,000 | KES 108 | KES 309 |
The float question: where does the money sit?
A common objection is that the pooled M-PESA float earns interest somewhere, so using the wallet supports riba. The pages Safaricom publishes on tariffs and limits do not describe where customer balances are held or what the trust arrangement earns, so we will not assert the mechanics here. What can be said with confidence is narrower and sufficient for most scholars: the customer receives no interest, pays no interest, and buys a service at a stated price. Any return earned by the operator on pooled funds is the operator's affair and does not enter the customer's contract.
If you want to go further, the practical step is to keep large balances out of the wallet and in an Islamic bank account, moving money in only when you are about to spend it. That also happens to save fees and keeps your savings inside KDIC's KES 500,000 cover, which money in a wallet does not have. Our comparison of Islamic mobile banking channels in Kenya shows how DIB, NBK Amanah and KCB Sahl customers pay bills straight from the bank and skip the wallet entirely.
M-Shwari: interest on both sides
M-Shwari, the bank-provided savings and loan product inside the M-PESA menu, is not halal on either side of its balance sheet, and Safaricom's own pages say why. The savings side pays interest: the FAQ sets 2% on KES 1 to 10,000, 3% on KES 10,001 to 20,000, 4% on KES 20,001 to 50,000 and 5% above KES 50,001, accrued daily and paid quarterly, with Lock Savings paying 3%, 5% or 6% depending on balance for one to six months. The product page describes it as earning interest of up to 6.3% a year. That is a return on a deposit fixed in advance by balance tier, which is the definition of riba.
The loan side charges a 7.5% facility fee plus 1.5% excise duty, which Safaricom presents as a loan fee rather than interest, on a 30-day loan; its FAQ insists the loan does not attract interest. A fixed percentage charged for the use of borrowed money over a month is a fee in name and an increase on a loan in substance, and Safaricom's terms also provide for a rollover fee if you do not repay on time. Our detailed treatment of Fuliza, M-Shwari and mobile loans goes through the contracts; the short answer is to deactivate M-Shwari and move the savings to Ziidi Shari'ah or a bank.
Ziidi: one fund is conventional, one is Shari'ah
Safaricom runs two funds under the Ziidi name and its pages are candid about the difference. The original Ziidi MMF, whose FAQ dates from December 2024 and which is managed by Standard Investment Bank and ALA Capital, invests in government securities such as Treasury bills and interest-earning accounts, charges a 2% management fee, and Safaricom's FAQ states plainly that it is an interest-earning money market fund. A Muslim should not hold it. Ziidi Shari'ah MMF, with pages published in August and September 2026, is managed by GulfCap Investment Bank under its Shari'ah Supervisory Board with KCB Bank Kenya as trustee, invests in sukuk, Mudarabah deposits at Islamic institutions and Shari'ah-screened securities, and excludes alcohol, gambling, conventional banking, weapons, tobacco and adult content.
Ziidi Shari'ah starts at KES 100, allows withdrawals from KES 10, charges nothing on deposits or withdrawals, builds the management fee into the displayed yield, deducts 15% withholding tax automatically and indicates a variable return of roughly 6% to 8%. It is reached through My OneApp or *334#, the same channels as the conventional fund, so check the name on screen before you opt in. Our full guide to the Ziidi Shari'ah Money Market Fund covers governance and the open questions; for a broader list of halal options, see the halal investing hub.
Lipa Mdogo Mdogo: an instalment phone, or a loan?
Lipa Mdogo Mdogo lets eligible prepaid customers take a smartphone after a deposit paid through M-PESA and clear the balance over up to twelve months by daily, weekly, monthly or full payments on 5445#. Safaricom's service page lists deposits such as KES 500 on a KES 10,000 device and KES 3,000 on a KES 18,000 device, and daily payments from KES 20. Each payment is split between the device balance and a voice, data and SMS bundle; a missed payment locks the phone and bars calls, and a 30-day default leads to CRB listing. Fuliza cannot be used to pay.
In Islamic law, selling a phone for a higher deferred price than its cash price is a permitted credit sale, bay' bi-thaman ajil, provided the total price is fixed at contract and does not rise with delay. Lipa Mdogo Mdogo's published pages show a device price and a deposit but not a separate cash price for comparison, and the terms describe the balance as a loan and the bundles as resources awarded on repayment. The device lock is an enforcement tool, not a charge, and is not objectionable in itself. The point to establish before you sign is whether the total you will pay is fixed on day one, and whether anything is added if you pay late beyond the lock and bar. Ask at the Safaricom shop, in writing, for the total device cost under your chosen plan versus the shelf price; if the two are equal and no late charge exists, the structure is a straightforward instalment sale.
Pochi la Biashara, Lipa na M-PESA and paybills
Paying a merchant is as permissible as paying cash. Safaricom's tariff page shows a promotional Pochi la Biashara table from 1 August 2026 in which payments up to KES 200 are free, KES 201 to 500 cost KES 7 and anything from KES 2,500 to 250,000 costs KES 50. Lipa na M-PESA buy goods payments are generally free to the customer up to published bands with the merchant bearing the charge, except at authorised fuel stations where the customer pays. Paybill payments to schools, KPLC or an Islamic bank account are likewise fee-for-service.
The one habit to drop is paying zakatable or interest-sensitive balances through products that bundle credit. Paying a paybill using Fuliza, for instance, turns a halal payment into a riba-bearing overdraft. Our note on zakat on M-PESA balances covers the other obligation that attaches to wallet money: if your M-PESA, Ziidi Shari'ah and bank balances together pass nisab for a lunar year, zakat is due on them.
A clean M-PESA set-up for a Muslim household
- Deactivate M-Shwari and move any balance to Ziidi Shari'ah or an Islamic bank savings account, then decline Fuliza so a short wallet cannot borrow automatically.
- If you hold the conventional Ziidi MMF, withdraw to M-PESA and opt out, then opt into Ziidi Shari'ah under My OneApp, Financial Services, or on *334#.
- Keep the wallet balance to what you will spend in the next week or two and hold savings at a KDIC-covered Islamic bank, since wallet money has no deposit insurance.
- Pay KPLC, school fees and SHA from your Islamic bank's app where it supports them, to avoid paying both a bank-to-wallet fee and a wallet fee.
- For a phone on Lipa Mdogo Mdogo, obtain the total plan cost against the shelf price and confirm that no charge beyond the device lock applies to late payment.
- Record your M-PESA, Ziidi Shari'ah and bank balances on one date each year for zakat.
Our view
Use M-PESA freely for what it was built for: moving and spending money at a fixed, disclosed fee. There is no riba in the wallet, the sends, the withdrawals or the merchant payments, and the fact that Safaricom pays nothing on balances is exactly why. Treat the credit and savings menu as a different product set with a different ruling: M-Shwari and the conventional Ziidi fund earn interest and should be switched off, Fuliza is an overdraft to decline, and Ziidi Shari'ah is a Shari'ah-supervised fund you can use for small savings with instant access.
Lipa Mdogo Mdogo is permissible in principle as an instalment sale and unresolved in practice until Safaricom shows you a fixed total price and confirms there is no late-payment increase; get that in writing or buy the phone outright. For balances beyond a fortnight's spending, an Islamic bank account from our Islamic bank accounts hub gives you KDIC cover and, in several cases, direct bill payment that bypasses the wallet fee altogether. Facts checked against safaricom.co.ke, kdic.go.ke on 21 September 2026.
Frequently asked questions
Is using M-PESA haram?
No. Depositing, sending, paying merchants and withdrawing on M-PESA are services bought at a fixed fee, and the wallet pays no interest on balances, so the core product contains no riba. The haram elements are optional add-ons: M-Shwari's interest-bearing savings and fee-based loans, the conventional Ziidi fund that invests in Treasury bills, and Fuliza's overdraft. Avoid those and the wallet is clean.
Is M-Shwari halal?
No. Safaricom's pages state that M-Shwari savings earn interest of 2% to 5% a year by balance tier, up to 6.3% on Lock Savings, and that loans carry a 7.5% facility fee plus excise duty over 30 days with a rollover fee if unpaid. Both sides are returns fixed on money rather than on trade, which is riba. Deactivate it and use Ziidi Shari'ah or an Islamic bank account.
Is Ziidi halal?
It depends which Ziidi. The original Ziidi MMF is, in Safaricom's own words, an interest-earning money market fund invested in Treasury bills, so it is not halal. Ziidi Shari'ah MMF, with product pages published in 2026 and managed by GulfCap Investment Bank under a Shari'ah Supervisory Board with KCB as trustee, invests only in sukuk, Mudarabah deposits and screened securities, and is the permissible option on *334# and My OneApp.
Is Lipa Mdogo Mdogo halal?
It can be, as an instalment sale, if the total price is fixed when you take the phone and nothing is added for late payment beyond the device lock and call bar that Safaricom describes. The published pages show deposits and daily amounts but not a cash price for comparison, and call the balance a loan. Ask for the total plan cost in writing against the shelf price before you commit.
Are M-PESA transaction fees riba?
No. A fee charged for performing a transfer or withdrawal is an ujrah, a payment for service, fixed at the time of the transaction and unrelated to any loan or delay. Safaricom's tariff charges KES 7 to send KES 101 to 500, KES 13 to send KES 501 to 1,000 and KES 108 above KES 20,000, plus 15% excise duty. These are prices, not interest.
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Do I pay zakat on my M-PESA balance?
Yes, if your total zakatable wealth, including M-PESA, Ziidi Shari'ah units, bank balances and other cash equivalents, has been at or above nisab for a full lunar year. The wallet balance is cash held on your behalf and counts in full at 2.5%. Our dedicated guide on zakat and mobile money in Kenya covers the method and the nisab calculation in shillings.
