Safaricom’s next growth frontier lies in banking

A decade later, M-Pesa has become a ubiquitous form of payment, settling transactions from the smallest of kiosks to the five-star hotels. As Safaricom celebrates 10 years of unprecedented success with M-Pesa, the company needs to urgently consider a formal entry into the financial services sector.

Whereas in the past it has played from the sidelines, Safaricom’s next ten-year strategy needs to be firmly anchored within the banking sector. The deposits that ordinary Kenyans are holding in their accounts could start attracting interest, which will encourage a more sustainable savings culture. Long-term savings could be consolidated to create long-term loans. Imagine a future where home mortgages are applied for and disbursed through M-Pesa!

Safaricom needs to develop a bold and aggressive growth strategy for the next 10 years that would see it operating in at least 20 African markets. The business model need not change. Firstly, position as a solution to financial inclusion for the unbanked. Secondly, build up a critical mass of agents and then finally become the gold standard for mainstream banking services. This could easily propel it to become a Pan-African teleco-banking giant alongside the likes of MTN Group.

Safaricom has demonstrated that the future of banking is in the SIM card. Developments in innovation, particularly fintech and Nairobi’s flourishing Silicon Savannah gives Safaricom a geographical comparative advantage second to none.

With the recent findings that one out of every 10 global mobile transactions is done in Kenya, Safaricom is sitting on a golden asset that needs to be the pillar of its next growth phase.

SOURCE:BUSINESSDAILYAFRICA