Safaricom recorded a Sh196.2 million net loss in M-Pesa Africa — the joint venture it formed with its South African parent firm Vodacom Group —in the year ended March.
The loss, which declined 37.5 percent from Sh314.1 million a year earlier, represents the telco’s 50 percent share of the mobile money firm’s financial performance. The other partner in the joint venture is South Africa’s Vodacom Group, which also holds a 50 percent stake in the business.
Safaricom’s latest results show the drop in the reported loss was attributed to higher revenue.
M-Pesa Africa’s sales increased to Sh4.2 billion in the review period from Sh3.18 billion the year before.
The loss in the previous year was caused by initial setup costs and lower M-Pesa revenues in the Covid-19 pandemic era.
Safaricom and Vodacom invested Sh1 billion each to acquire the M-Pesa brand from UK multinational Vodafone Group Plc and form the joint venture. The venture aims to increase uptake of the M-Pesa service by growing the mobile money market in Africa.
“The new joint venture will strategically help accelerate M-Pesa growth in Africa by giving both Safaricom PLC and Vodacom Group Limited full control of the M-Pesa brand in Africa,” said the Nairobi securities exchange listed telco.
M-Pesa Africa is aimed at taking the mobile financial services platform beyond existing markets served separately by Safaricom and Vodacom.
Safaricom operates M-Pesa directly in Kenya while Vodacom runs the service through its subsidiaries in Tanzania, the Democratic Republic of Congo, Mozambique and Lesotho.
M-Pesa Africa is focused on new markets such as Rwanda, Tanzania, Uganda and overseas territories, working with payments partners like PayPal, Western Union, and AliExpress.
Safaricom says the joint venture helps the partners to share and develop resources, enabling the deployment of a wide variety of products in all the M-Pesa markets.
Mobile money is a growing and highly profitable service for telcos operating in the continent including Safaricom, Vodacom, Airtel, and MTN.
The owners of the M-Pesa platform have plans to roll out new services in the various markets including insurance and investments.
