Safaricom registers growth during global pandemic
Kenya’s leading telecommunications service provider Safaricom contributed 6% to the country’s GDP in the last financial year and sustained one million jobs directly and indirectly through its economic output.
According to the company’s latest Sustainable Business Report released this week, the total number of customers grew 12% in the last financial year, to reach 35.6 million. The company also registered robust growth across its business divisions in the months following the global outbreak of the COVID19 coronavirus pandemic.
The number of M-Pesa customers increased by 10% to reach 24.9million, as more Kenyans turned to mobile payments following the outbreak of COVID19. The report said the value of M-Pesa transactions in the last financial year stood at Sh13.9trillion (USD$128million), an 18% increase from the 2019 Financial Year.
“This year more than ever we’ve had to show Safaricom’s strength as a digital and technology service provider because we’ve become a lifeline for many Kenyans during this pandemic,” said the company’s CEO Peter Ndegwa during the launch of the report.
“A good number of Kenyans have worked from home and have been separated from their families,” Ndegwa said. “During this time, Safaricom’s team has ensured that our products and services keep our customers connected to their families and livelihoods.”
According to the report, the company grew its fibre optic network by 34% in the last financial year. This infrastructure mirrored development the demand for connectivity the company registered in the months following the outbreak of COVID-19.
Businesses connected to the firm’s fiber optic network doubled to 11,911, while the number of enterprise buildings connected rose 63% to 3,960.
Safaricom’s Fuliza service registered more than 1000% growth in the amount of money disbursed in the past financial year, as Kenyans turned to the mobile overdraft facility for respite during the COVID-19 pandemic. The report said overdraft facilities processed through Fuliza shot up from Sh29billion (USD$267million) in the 2019 financial year, to Sh245billion (USD$2.2billion) in 2020.
Safaricom launched Fuliza in January 2019 as a data-driven lending facility that allows consumers complete transactions on their mobile wallets even when they ran out of funds.
The strong performance of Fuliza outstripped analysts' predictions, largely fueled by the disruption from COVID-19. In March 2019, analysts at Sterling Capital projected Fuliza loans to stand at Sh200billion (USD$1.8billion) in one year.
“Fuliza will have a positive impact on M-Pesa transactional volumes, revenues, customer acquisition as well as retention,” said the investment firm in its analysis report. “We also see it changing the competitive landscape with regards to mobile and digital payments. “
In the last financial year, the number of smartphones in the company’s network rose to 23% to 15million, roughly half of its subscriber base. Digifarm, the online platform for small holder farmers registered a 40%, with 1.4million farmers now signed up.
The company said it will continue investing in its digital offering and network infrastructure in the near future to better serve the growing subscriber base.
“The pandemic has also highlighted the importance of partnerships,” Ndegwa said. “Whether we are partnering with the Ministry of Health to disseminate public health information or partnering with the banks to provide micro- businesses with vital financial support through M-PESA.”