M-Pesa deposits fall Sh10bn in six months

Safaricom shop

A Safaricom Shop located along Kimathi Street as pictured on March 8, 2023.

Photo credit: Francis Nderitu | Nation Media Group

Safaricom customer deposits in the mobile money wallet, M-Pesa, fell by Sh10.6 billion to Sh263.3 billion in six months ended March 2024, signalling more withdrawals to cash and other platforms, including banks in the review period.

The four percent decline was from Sh273.9 billion held in M-Pesa at the end of September last year, even as the value of transactions on the platform hit Sh40.24 trillion.

At Sh263.3 billion in deposits, Safaricom is one of the largest players in the financial services market where the top two largest banks by deposits —KCB Bank Kenya and Equity Bank Kenya—held Sh1.12 trillion and Sh609.7 billion respectively as deposits at the end of December 2023.

M-Pesa is used more for transfers and payments as opposed to savings, explaining its relatively smaller deposit base despite having more customers compared to banks.

Safaricom data shows the value of withdrawals in the financial year ended March 2024 was Sh25.61 billion, with Sh14.13 billion happening in the second half of the review period. The Sh25.61 billion withdrawals came in the period deposits were Sh5.86 billion while person-to-person transfers were Sh6.2 billion.

The second half of the telco’s financial year coincided with the period of December festivities and school fees payments for the first term of 2024. The telco has, however, not linked the Sh10.6 billion fall in deposits held in M-Pesa to this.

The Nairobi Securities Exchange-listed firm started disclosing the value of deposits in M-Pesa in September last year, coming after it took control of M-Pesa Holding Company Limited from its parent company, Vodafone Group for a token amount of $1 (Sh130).

M-Pesa revenue grew 19.5 percent to Sh140 billion in the financial year ended March 2024 to account for 40.1 percent of the Sh349.45 billion revenue the telco posted in the review period.

Safaricom closed the period with 44.67 million M-Pesa customers, with 34.64 million being active for at least a month. Started as a person-to-person cash transfer platform in 2007, M-Pesa has since grown to offer savings, credit, payments, international remittances and investment services, among others.

The Central Bank of Kenya wants M-Pesa to be split from the telecoms business to enable a more effective regulation of the mobile financial services.

Safaricom maintained a Sh1.20 per share amounting to Sh48.08 billion after net profit grew by 1.2 percent to Sh62.99 billion in the review period, helped by growth in M-Pesa and mobile data revenue. Safaricom net profit grew from Sh62.27 billion the previous year.

Net profit from Safaricom Kenya grew 13.7 percent to Sh84.74 billion while Safaricom Ethiopia posted a Sh42.09 billion net loss out of which the Kenyan multinational telco's share is Sh21.7 billion, given it holds 51.67 percent stake in the Ethiopian business.

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