(Ecofin Agency) - The Central Bank of Kenya has decided to extend for a further 6 months its measure allowing money transactions via mobile phones to be charge-free for users. The money issuing institution says it wants to reduce direct and indirect contacts between people in this context of the global health crisis.
This decision will further affect the revenues of Safaricom's mobile money transaction platform, M-Pesa, which dominates the sector with almost 99% of mobile transactions. The company said the implementation of the measure, which started in March, made it lose KSh1.8 billion per month (about $16.9 million). With another 6 months, the company anticipated an overall loss of KSh16.2 billion ($152.1 million), nearly 20% of M-Pesa's revenues for 2019.
Safaricom's management is understanding. According to CEO Peter Ndegwa (pictured), who took the helm on April 1, “when Kenya gets back on track, our company should follow the same trend. We are in a good place to be able to weather this storm, but our business is linked to how the country comes out on the other side.”
Things are more difficult for commercial banks. At this time, interest income is under pressure and operating margins are down due to the credit restructuring banks have had to carry out (about $3.4 billion). Some banks have agreed to waive mobile cash withdrawal fees. Others, on the other hand, say they are waiting for approvals from their boards of directors.