Business Times Africa Magazine 2017 /vol 9/ No2 BT2Edition2017_web | Page 15

BRIEFS: EAST AFRICA
M-pesa money service target
Africa expansion
Vodafone's popular mobile finan-
cial services M-Pesa will expand into
more African countries, giving mil-
lions of people access to banking ser-
vices without the need for a bank ac-
count.
M-Pesa was set up a decade ago by
Safaricom, Vodafone's Kenyan busi-
ness, and has long been expected to
push further across Africa. Its technol-
ogy lets users with even a basic mo-
bile handset borrow money and save
through partnerships with local banks.
M-Pesa, regulated by the Kenyan
central bank, accounts for more than
a quarter of Safaricom's annual reve-
nue, growing 21 percent in its year to
March 31.
This month, UK-based Vodafone,
one of the world's top telecoms opera-
tors, transferred its 35 percent stake in
Safaricom, Kenya's biggest company
by market value, to its majority-owned
South African subsidiary Vodacom.
It retained a 5 percent stake in Safa-
ricom.
The share transfer nullified South
African government objections to ex-
pansion moves by Safaricom. South
Africa wanted Vodacom to be the vehi-
cle for Vodafone's African expansion.
"This removes that effect today,"
said Bob Collymore, who has led Safa-
ricom since 2010.
When analysts have previously que-
ried why Safaricom did not expand
into neighbouring markets such as
Ethiopia, Collymore has said Kenya
was still growing. Now, he says, the
business is ready to expand.
"For us, the obvious advantage is
that it (Vodafone/Vodacom deal) now
gives us an opportunity to try some
stuff overseas," he said.
The platform, which even allows
users to buy government securities in
Kenya, has attracted attention from
other African nations such as Liberia,
Ethiopia and Togo.
"The courtship started a little while
ago. We are respected in Kenya as the
mobile money country," Collymore
said.
Safaricom would now look at all
African markets, apart from South Af-
rica, where an M-Pesa-like product
previously failed; and Tanzania, which
already has a thriving mobile money
service also called M-Pesa operated by
Vodacom, Collymore said.
About 38 percent of Kenyans have
commercial bank accounts compared
with 77 percent in South Africa, ac-
cording to FSD Kenya, a development
programme funded by Britain that
works to expand access to financial
services.
Expansion of M-Pesa was not ex-
pected to require a lot of capital as the
critical investment is the skills that Sa-
faricom has acquired in the past dec-
ade, the CEO said.
"I'd like to be able to talk about
something before the end of the year,"
he said.
The $2.6 billion share transfer deal
also means that Vodafone no longer
has a veto over the selection of a chief
executive for Safaricom.
Under the previous shareholding
structure, Vodafone had the right to
veto the appointment but not the
right to appoint the company's CEO.
Future selections will be guided by
terms to be agreed on by the share-
holders, Collymore said.
2017 Business Times Africa 13