Safaricom Talking to Banks to Grow Mobile Money

Safaricom Ltd., Kenya’s largest company by market value, is in talks with 19 banks in the East African nation to increase users of its mobile-money transfer platform, Chief Executive Officer Bob Collymore said after the company posted higher annual profits.

Safaricom’s M-Pesa product -- which offers services including money transfers, loans,betting and bill payments -- had transactions worth 5.29 trillion shillings ($52.6 billion) in the year through March, equivalent to 85 percent of the total national economic output.

“Nineteen banks are now doing real-time payments,” Collymore said in an interview in the capital, Nairobi. Previously, merchants had to wait two days before payments reflected in their accounts.

Beats Expectations

While the loan and deposit accounts product had recorded a good performance, it still represents less than 1 percent of Safaricom’s total revenue, according to Binta Cisse Drave, an analyst at Exotix Partners LLP. The service allows users to have mobile-phone bank accounts from which they can borrow loans or earn interest on savings.

The Nairobi-based company’s net income jumped 19 percent to 38 billion shillings in the year through end March, compared with the 36.3 billion shillings median estimate of nine analysts surveyed by Bloomberg. It warned that the growth in earnings before interest, taxes, depreciation and amortization may slow down to a range between 89 billion shillings and 92 billion shillings in case the shilling depreciates.

The shilling declined 13.2 percent against the dollar last year, though it’s gained ground this year, rising 1.5 percent.

SOURCE:BLOOMBERG