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Uhuru slaps M-Pesa with 66pc mobile cash tax rise

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The government has been encouraging cashless payments to improve security and reduce fraud. FILE PHOTO | NMG 

The cost of sending money through mobile services such as Safaricom’s #ticker:SCOM M-Pesa will increase further after President Uhuru Kenyatta proposed to raise tax on the services from 12 per cent to 20 per cent.

Mr Kenyatta is targeting products like mobile money that are consumed by a vast majority of Kenyans in an attempt spread the burden of taxation.

“Excise duty on fees charged for money transfer services by banks, money transfer agencies and other financial service providers shall be 20 per cent of their excisable value,” he said.

The review comes just weeks after Treasury secretary Henry Rotich increased the tax by two percentage points to 12 per cent in July 1, prompting operators to increase M-Pesa charges.

On July 1, Safaricom raised the M-Pesa charges with those dealing with higher transactions bearing the heaviest burden.

Withdrawal of amount between Sh501 and Sh2,500 from M-Pesa agent went up by Sh1 to cost Sh28 up from Sh27 while withdrawing Sh2,501 and Sh3,500, which was previously Sh49 went up to Sh50.

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The same Sh1 increase also applied to withdrawals between Sh3,501 and Sh5,000, which moved to Sh67. Further, withdrawing between Sh5,001 and Sh7,500 and Sh7, 501 and Sh10,000 would cost Sh2 more up from Sh82 and Sh110 to Sh84 and Sh112 respectively.

Safaricom slapped a Sh3 increase on transactions between Sh10,001 and Sh15,000, which now stand at Sh162. A Sh4 increase applied on withdrawals between Sh15,001 and Sh20,000 up from Sh176 to Sh180.

Safaricom said higher duty on mobile payments would reverse the gains made on cashless payments and mostly hurt the poor, most of whom do not have bank accounts and rely on mobile cash transfer services.

The government has been encouraging cashless payments to improve security and reduce fraud. M-Pesa revenues grew 14.2 per cent to Sh62.9 billion for the financial year ended March 2018.

Mr Rotich had earlier said funds from the tax increase will be used to fund universal healthcare plan that aims to cover all households by 2022.

Some Sh3.7 trillion was transacted via mobile phones in the 12 months to March 2018, with M-Pesa controlling more than three quarters of the transactions. Millions of Kenyans rely heavily on mobile money keeping value of transactions on a steady growth path in the past 10 years.



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Lami Technologies closes $1.8 million seed funding to accelerate growth of digital insurance in Africa

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NAIROBI, Kenya May 5 – Lami Technologies, a Kenyan insurance technology (insurtech) company that aims to democratize insurance products and services for low-income Kenyans, announced today it has raised $1.8 million in seed funding.

The round was led by Accion Venture Lab’s seed-stage investment initiative that provides capital and extensive support to innovative fintech startups that are improving the reach, quality, and affordability of financial services for the underserved.

Founded by Jihan Abass in 2018, Lami is a digital insurance platform that enables partner businesses – including banks, tech companies, and other entities to easily and seamlessly offer digital insurance products to their users via its API. Lami can also be used by partner businesses to manage their own insurance needs.

Lami connects partner organizations, such as e-commerce platform Jumia, with underwriters and allows them to offer a superior customer journey. Through its API, users can get a quotation for motor, medical, or other tailored insurance products in seconds, then customize the benefits and adjust the premium to suit their needs, get their policy documents instantly, and claims are paid in record time.

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Lami’s services are enabled by its flexible insurance rating engine and direct integration with several parties and insurance companies. Lami co-designs innovative products with its underwriting partners to enable businesses to offer unique insurance products to their underlying customer base, with flexible options that meet their needs and cash flows, such as monthly medical policies for startup employees.

Jihan Abass, CEO, Lami, said: “This funding will allow us to invest in hiring more people, improving our technology, and growing our presence across Africa as we can continue to address the persistent insurance gap. At Lami, our vision is to help improve the financial resilience of millions by making insurance products more accessible and affordable for underserved populations. By enabling our business partners to offer customized insurance solutions, we are helping them provide more value to their customers, while enabling large volumes of users to access insurance, often for the first time.”

Africa’s insurance market currently stands at a 3 percent penetration rate, expect for South Africa, and is facing modernization and innovation challenges. Most insurance providers on the continent fail to offer flexible, affordable and tailored insurance coverage that can provide a safety net for the African consumer. Low insurance uptake is partly due to the traditional distribution and administration of policies, which mainly still relies on brick-and-mortar channels where policies are sold and processed.

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safaricom share price declines lowering NSE activity

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Safaricom Plc, the most capitalized at the Nairobi Securities Exchange(NSE), had its share price dip by 0.16%, bring down turnover at the bourse by 50% to KSh 249.4 Million.

Figures from the bourse indicate that Safaricom was the top mover at the bourse with a volume of 4.58 Million shares, followed by KCB( 838,100), Kenya Re(461,300), Centum (255,300) and NSE( 227,700).
Eveready E. A was the top gainer with a 9% gain to KSh 1.09, followed by Sasini, which was up 7.37% to KSh 18.95, Carbacid Plc which gained 5.50% to KSh 11.50, Home Afrika, which gained 5.26% to KSh 0.40 and Housing Finance which appreciated 4.72% to KSh 3.90.

The worst performing counters were led by Centum, followed by I&M, Longhorn, Safaricom and Absa Bank.

Eveready E. A Plc was the top price gainer at the lacklustre Nairobi Securities Exchange(NSE), its share price rising 9% and closing at KSh 1.09.

The listed firm began the year with a share price of KSh 1.20 but has since lost 9.17% off that price valuation, ranking it 50th on the NSE in terms of year-to-date performance.

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Turnover at the NSE dropped to KSh 249.4 Million with a total of 7,540,900 shares in 955 deals traded.

Eveready was followed by Sasini Plc (7.37%), Carbacid Plc(5.5%)and Home Afrika Plc(5.26%).

Compared with the Tuesday, May 4th 2021 trading day, today’s data shows a 47% decline in volume, a 50% decline in turnover, and a 3% decline in deals.

Centum Investment Plc was the worst performer, its share price falling 3.22% to KSh 15.05 per share. Others were I&M Holdings Plc which declined (0.7%), Longhorn Publishers Plc(0.66%) and Safaricom Plc (0.61%).

The benchmark NSE All-Share Index [NASI] declined 0.38 points to close at 169.69. The NSE 20 Share Index gained 16.68 points to close at 1862.07. The NSE 25 Share Index fell 0.23 points to close at 3685.10

The derivatives market had 32 single stock futures contracts valued at KSh 1.58 Million concluded, compared to the 70 SSF contracts valued at KSh 2.76 Million ended during the previous session.

The secondary bond market had bonds worth KSh 2.97 Billion transacted in 61 deals than the KSh 5.42 billion worth of bonds achieved in 137 deals in the preceding session.

ALSO READ: Safaricom’s Bid for Ethiopian Telecom license excites Investors

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Domestic air travel fares double on high demand

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Domestic air travel fares double on high demand


Passengers disembark from a Jambojet plane at Jomo Kenyatta International Airport, Nairobi. FILE PHOTO | NMG

geraldandae

Summary

  • Kenya Airways ticket price have shot to Sh10, 050 on Mombasa and Kisumu routes from a low of Sh5, 000 when the flights resumed on Sunday.
  • KQ, which started with two flights to Mombasa and one in Kisumu on Sunday, has so far added additional flights on these routes.

The cost of domestic flights has doubled on some routes since Sunday when the air travel resumed after the lockdown as airlines record high demand, forcing carriers to increase frequencies on different routes.

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Kenya Airways ticket price have shot to Sh10, 050 on Mombasa and Kisumu routes from a low of Sh5, 000 when the flights resumed on Sunday.

KQ, which started with two flights to Mombasa and one in Kisumu on Sunday, has so far added additional flights on these routes.

Curbs on travel in the Nairobi and four surrounding counties were lifted Saturday following the easing of restrictions that saw a reopening of bars and restaurants, religious services and schools as the rate of infections eases.

Budget carrier Jambojet was charging Sh4,600 on Sunday in almost all the routes but the fares have so far gone up to Sh6,100, reflecting a 32.6 percent jump.

KQ will now operate up to six flights on Mombasa route with the Kisumu journey having been scaled up to two. Jambojet is operating four flights a day to Mombasa and two to the lakeside city and Eldoret (two).

“We are increasing the frequencies of our domestic flights. Fly three times a daily with us from May 4 and six times daily from May from May 7 from Nairobi to Mombasa,” said Kenya Airways.

Jambojet said the demand for flying has so far picked when compared with Sunday when they resumed their operations.

“We have seen the demand going up compared with Sunday when we started, there is a growth in bookings in the coming days especially for those who are making future bookings,” said Jambojet.

Passengers who booked KQ flight yesterday (Wednesday) for 5pm parted with Sh10,050 for a one way to Mombasa with a low of Sh5,070 in the morning and midday flights, while the cost of a seat on Jambojet to the same route is going for Sh6,100.

This are almost the same rates that the airlines were charging before the carriers were grounded after the government imposed a second lockdown in March.

An increase in frequencies and relatively high fares is an indicator that the aviation sector, which has been hit hard by Covid-19, is witnessing enhanced demand on number of passengers seeking air travel.

Fares to Eldoret on Jambojet range from Sh4,600 to Sh7,100 on some days such as yesterday (Wednesday), while the Kisumu route is going at between Sh5,100 and Sh6,100.

Return ticket from Kisumu to Nairobi on some days go as high as Sh7,100 with the lowest fare going at Sh4,600 for a one way ticket while it will cost a passenger between Sh4,600 and Sh5,600 to fly from Mombasa to Nairobi.

The government had in March restricted movement of people in and out of Nairobi and four other neighbouring counties to slow the spread of Covid-19, cutting movement of air travel on western Kenya and coastal Kenya out of Nairobi, which is a hub for all the local carriers.

The five counties are being treated as one Covid-19 high risk zone, with residents barred from crossing over to other areas.

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