Kenyans sent Ksh.4.4T for free on M-Pesa during fee waiver period

Kenyans sent a high of Ksh.4.4 trillion shillings for free under the waiver of fees subjected to transactions of up to Ksh.1000 between March 16 and December 31 last year on the M-Pesa platform.

This is according to new disclosures by telecoms operator Safaricom on Thursday from which Safaricom marked a slump in profitability.

The value of transactions under the waiver window is represented by 1.7 billion individual transactions by Kenyans over the same period.

Broken down to a daily tally, this means that Kenyans sent an average Ksh.15.2 billion everyday for the 290 day stretch of the waiver on fees.

From the waiver of fees, Safaricom marked a Ksh.4.2 billion net loss in the reduction of transfer revenues in its financial year ending on March 31, 2021.

The loss was however offset to just Ksh.1.8 billion by growth in M-Pesa revenues from betting, withdrawals, M-Pesa Global, lending and savings.

Revenue from transfers nevertheless marked a recovery on the end of the waiver period to post returns of Ksh.14.5 billion for Safaricom in the second half of its financial year from Ksh.9.6 billion in the half to September 2020.

Cumulative M-Pesa revenues were marginally down by 2.1 per cent at Ksh.82.6 billion.
The M-Pesa platform has nevertheless sustained its growth velocity as mirrored in transaction values, volumes and active customers.

For instance, Kenyans transacted a total of Ksh.22.04 trillion on the platform between April 2020 and March this year representing a 58.2 per cent surge year on year.

Meanwhile, transactional volumes rose by 29.8 per cent to 11.7 billion individual transactions across the year.

At the sametime, the number of one-month active Lipa na M-Pesa tills rose by 74.8 per cent in the year to just over 302,000 as the number of one month active M-Pesa customers increased by 13.6 per cent to Ksh.28.3 million.

M-Pesa has now matched voice (and is now set to overtake) as Safaricom’s top revenue earner at a par 33 per cent.

Whilst the waiver of fees on transactions has since lapsed, Safaricom’s Chief Finance Officer Dilip Pal says both the volumes and value of transactions has still held steady.

“Both the volume and value of transactions has been holding. There has been a very marginal decline as we start recharging. This means that the underlying health of M-Pesa is very strong,” he said.

On his part, Safaricom Chief Executive Officer Peter Ndegwa says the subsequent reduction of charges on transactions below Ksh.1000 has anchored down usage.

“As we worked back to charging, we reduced the costs by up to 45 per cent for the transactions. This as also helped in ensuring that customers continuously afford the services,” he added.
The Ksh.4.4 trillion sent for free equates to about 39 per cent of Kenya’s estimated Gross Domestic Product (GDP).