The coronavirus outbreak caused a devastating blow to the brand mobile money arm M-Pesa which platform registered a drop in revenue by 14.5% YoY
Safaricom has published its HY results ending on 30 September for the 2020/2021 financial year in a live stream showcased on its social media platform, Youtube channel, and other platforms like Zoom. The telecom giant and mobile money operator reports show that the COVID-19 pandemic impacted their business performance for both the carrier service and mobile money arm M-Pesa. Meanwhile, it sustained investment to support customer growth. For the first time, the carriers' service revenue dropped by 4.8% YoY to KES 118.42b. Profits before interest and tax dropped nu 10.5% to Kes 44,968.0m.
While the presentation of the financial results was conducted by acting CFO, IIIanna Darcy, following the departure of Satessh Kamath to Vodafone, the telecom mobile money product, M-Pesa registered a dip in profits for the first time. A CBK directive compelled mobile money products to a zero-rate person to person transfers of under Kes 1,000 and bank to M-Pesa and wallet to bank transfers.
Other services that were zero-rated are paid bill tolls for government hospitals to avoid handling of cash. These products and their associated services make M-Pesa billions in terms of transaction fees. Some measures were put in place to address the pandemic's effects and should be lifted before 2021.
The CEO Peter Ndegwa (pictured right) said, "this has been a challenging period for businesses and our customers, and we are committed ourselves to walk through this journey together. During this period, we took several initiatives to support our customers and the government to pull through this pandemic."
The coronavirus outbreak caused a devastating blow to the brand mobile money arm M-PESA which platform registered a drop in revenue by 14.5% YoY.
Nevertheless, the total M-Pesa transaction value grew by 32.9% YoY to Kes 9.04 trillion. The volume of M-Pesa transactions grew to KES 5.12 billion transactions. Despite the increased volume of transactions amid the COVID-19 pandemic, which prompt countries to imposed lockdown to curb the spread of the virus and government were encouraging people to make payment online rather than using cash due to the possibility to catch the virus through the use of paper money this prompt a lot of people to transact online and business to deal with customers online but still, that could not save M-PESA from experiencing a decline in profits. This can be attributed to the Africa economic situation that has been contracted due to the crisis.
Written by, Adeleye Awakan: An Author, iGaming and gambling industry, AI, Blockchain, Fintech, researcher, and consultant with over five years of experience in the Africa iGaming industry. Connect with him on LinkedIn: Adeleye Awakan: Skype: live:a2b5e96b401c7985: Email:firstname.lastname@example.org.
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