Safaricom is banking on M-Pesa and data revenues to drive the next growth phase as the telco marks hitting 30 million active subscribers.
The company has over the last two decades expanded its portfolio from offering just voice and SMS into other areas such as education, agriculture, health and financial services and is now looking to consolidate the gains made in those areas.
“We would like to thank each of our more than 30 million customers for choosing Safaricom as their preferred network which has contributed to our achievement of this remarkable and historic milestone,” said Chief Customer Officer Sylvia Mulinge.
Mulinge made the remarks during a ceremony in which Safaricom recognised its 30 millionth customer, Denis Muthii, aged 19. The firm said it will fulfil his ambition to join a leading technical institution in the country. Muthii will see Safaricom fund his tuition and upkeep for a technical course in Mechanical Engineering.
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Data from the company’s latest earnings report indicates the company currently counts more than 21 million active users on M-Pesa who, on average, make 12 transactions each, every month.
Annual revenue per user (ARPU) on the service has also risen 10 per cent in the last one year to Sh284.
The company is strategically positioning itself for the not-too-distant future where big data will form the bulk of revenue for telecommunication companies, with M-Pesa being central to this strategy.
While earnings from voice continue to make a large part of Safaricom’s revenue basket, growth has plateaued in recent years.
According to the company’s financial reports, growth in voice revenue has fallen from 8.5 per cent in the 2008/2009 financial year to 1.4 per cent recorded in the 2018 half year.
Today, it is becoming more urgent for Safaricom, the current market leader in the country’s digital economy, to reposition itself for the growing big-data economy. In addition to falling incomes from traditional sources, increasing regulatory and competitive pressures are other catalysts that are driving Safaricom’s shift.
This has informed the company’s shift towards data analytics, with a runaway success in M-Shwari and KCB M-Pesa which now account for the bulk of new loans recorded in the country’s financial sector.
The recent launch of Fuliza, the overdraft facility on M-Pesa that allows users with limited finances in their wallets complete their transactions, has also been a pointer to the revenue opportunity in combining data analytics and mobile money.
Safaricom, which will later this year mark 19 years since being founded, has further spent more than Sh100 billion in the last three years to lay down network infrastructure.
Currently, the company covers almost half of the country’s population with 4G mobile connectivity while its 3G and 2G networks reach more than 91 per cent and 96 per cent of the population respectively.
Besides its products and network, Safaricom has also placed a lot of focus in being close to its customers through initiatives such as ‘Ndoto Zetu’.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.