M-Pesa’s total transactions value hits Sh30 trillion mark

Friday, May 13th, 2022 00:30 | By
Safaricom CEO Peter Ndegwa during the release of the 2021/22 Full Year Financial Results. PHOTO/Courtesy

Kenyans have a penchant for requesting that any M-Pesa money sent to them should have extra money for withdrawal charges, hence the tuma na ya kutoa phrase.

Well, this may pass as a trite statement but going by the records of the giant telco, the value of money in the M-Pesa transactions is 10 times the amount Kenya plans to spend in the current Budget.

Safaricom records show the mobile money platform increased the total value of transactions by 34 per cent last year to hit the Sh29.5 trillion mark for the financial year ended March 2022.

This saw earnings from the platform increase to Sh107.7 billion having grown from Sh82.6 billion in 2021, indicating the increasing importance of M-Pesa to Kenya’s financial sector.

The telco attributes the growth in revenues to the full return of fees and transactions of up to Sh1,000. Charges on transactions below that amount had been removed during the peak of the Covid-19 pandemic to encourage the use of mobile money transactions.

During the period under review, Safaricom posted Sh67.5 billion in net profits in a 1.7 per cent reduction, compared to Sh68.7 billion posted in the same period last year.

Chief executive Peter Ndegwa said the telco had injected Sh10.4 billion out of total capital expenditure (Capex) of which Sh49.8 billion was spent in the Ethiopia bid which partly explained the drop in earnings.

“Velocity in the ecosystem continues to grow driven by our business and financial services solutions including payments, lending, savings and international remittances,” Ndegwa said.

Final dividend

However, growth was evident from revenue collection which increased to Sh298.1 billion from Sh264 billion posted in 2021, as M-Pesa services, mobile data, fixed service and wholesale transit revenue drove growth.

Earnings before interest, taxes, depreciation and amortisation increased to Sh149 billion from Sh134.1 billion the previous year, while profit before tax increased from Sh93.6 billion in 2021 to Sh102.2 billion in the review period.

Shareholders will take home proceeds from the profits after the Safaricom board recommended a final dividend of Sh0.75 per share amounting to Sh30.04 billion, which brings the total payout for the year to Sh56 billion. An interim dividend of Sh0.64 per ordinary share amounting to Sh25.64 billion.

Ethiopia operations

M-Pesa made a strong rebound in a 30.3 per cent year-on-year growth to Sh107.7 billion as more Kenyans continued to use the facility to transact business and finance operations.

This was mainly due to the resumption to charging of previously zero-rated transactions from January, which saw total transaction value grow by 34 per cent to Sh29.55 trillion.

During the year in review, the company launched M-Pesa App for customers and M-Pesa Business with mini-apps functionalities to power digital consumer lifestyles and empower businesses.

Mobile data revenue grew to Sh48.4 billion through personalised offers to customers, while fixed service and wholesale transit revenue by 18.3 per cent to Sh11.2 billion, because of the penetration of home fibre and growth in enterprise fixed data revenue.

Voice service revenue also grew by 0.8 per cent to Sh83.2 billion.

“Our strong growth and achievements this financial year are due to the strong strategy execution and the business commitment to prioritise the needs of our customers. We will continue to be a sustainable purpose-led business as we transition to become a technology company by 2025,” said Ndegwa.

The Nairobi Securities Exchange (NSE) listed telco is on the cusp of launching commercial operations in Ethiopia as part of the company’s regional expansion bid to provide telecommunication services to more than 112 million Ethiopians.

Ndegwa said its first cross-border investment in Ethiopia will be commercially launched this year as it bids to access the populous nation.

The Ethiopian outfit has recruited over 300 staff of which 50 per cent is a local talent with plans to reach a staff level of 1,000 in the next financial year.

It also has on-boarded distributors, secured four retail shop locations and set up the first outsourced call centre in Addis Ababa, in addition to building two data centres and securing approvals for tower development.

Active subscribers

“We have made significant progress towards a commercial launch. We are engaging with the Ethiopian Communications Authority and other relevant partners about the requirements for ensuring a commercial launch this year,” Ndegwa said.

Out of a total Sh49.8 billion capital expenditure (Capex), the Ethiopia business got Sh10.4 billion while Kenya got Sh39.3 billion, a 42.4 per cent increase from 2021.

The telco’s customer base rose 6.4 per cent to 42.4 million in one-month active subscribers for the period, with customers growing across all revenue streams, while active M-Pesa customers in Kenya grew to 30 million.

Safaricom remitted to the government Sh124.7 billion in taxes and license fees increasing the total duties, taxes and fees paid since inception to Sh1.04 trillion.

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