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Safaricom monitoring use of free M-Pesa transactions offer

Safaricom monitoring use of free M-Pesa transactions offer

Safaricom has revealed that it is watching the use of its new M-Pesa Kadogo offer of free transactions for amounts of less than 100 Ksh in order to determine whether a limit should be imposed on the number of transactions per user. The mobile operator introduced M-Pesa Kadogo during the release of its unaudited half year 2017 results (for the period ended September 30 2016).

"Delivering our financial inclusion agenda remains at the core of our strategy to transform lives. To further deepen the financial inclusion and in response to our customers' feedback, we have reviewed charges for person-to-person and Lipa Na M-Pesa transactions under Kshs100. Under the "M-Pesa Kadogo" it will be free to send values of KShs100 and below. We have done this to empower the people who support this company the most – the mama mbogas, the small businessmen and the micro agents who form our network. We shall continue to grow the adoption of savings and uptake of loans through M-Pesa, and grow cashless business payments and transactions,"Safaricom explained in its announcement.

Three days after the launch, the company has advised that the popularity of M-Pesa Kadogo over time will inform any decision to add conditions.

"There is no limit to the number of transactions one can perform under 100 Ksh on M-Pesa. The reason being, since the announcement there has been no drastic changes in terms of traffic for such transactions.Therefore, there's no need to limit the number of transactions so far."

During the results announcement, Bob Collymore, Safaricom CEO pointed out that M-Pesa is still growing exponentially, although mobile data is still Safaricom's fastest growing revenue stream.

"M-Pesa revenue recorded a growth of 33.7% to Kshs 25.9bn driven by 12.2% increase in 30 day active M-Pesa customers to 17.6m and a 38.4% growth in monthly usage per customer to 9.3 transactions per month."

Safaricom says as M-Pesa Kadogo is in response to the needs of its customers, it will also capitalise on the growth in mobile data by focusing on increasing the numbers of 3G and 4G smartphones on its network through launching more 4G (LTE) sites and offering affordable smart devices. This will happen alongside fibre rollout to homes around Kenya.

Collymore also noted that while Safaricom's subscriber numbers also shot up by 6% to 26.6m over the last six months giving the mobile operator a subscriber share of 65.2%, voice revenue saw minimal growth.

"Service revenue grew by 15.4% to Kshs 98.0bn driven predominantly by growth in 30 day active users and increased usage of non–voice services mainly M-Pesa and mobile data. Non-voice service revenue accounted for 53.4% of service revenue, recording a growth of 31.7% to Kshs 52.3bn. Overall voice service revenue now stands at 46.6% of service revenue and remained resilient growing by 1.1% to Kshs 45.7bn."

Investment in network infrastructure over the last six months totalled Kshs 18.9bn according to Collymore. Safaricom's expenses as a percentage of total revenue declined to 20.6% compared to 22.5% in a similar period last financial year. Audited full year financial results from Safaricom are expected in March 2017.

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