The Central Bank of Kenya (CBK) says plans to separate M-Pesa from other Safaricom businesses is still on course, and a meeting with the telecommunication company’s board over the matter will happen in the near future.
- •In 2022, CBK held talks with telecommunication companies with a view to separating mobile money activities from other businesses to enhance governance and minimize shocks on bank-related transactions.
- •A bill before Parliament – Kenya Information and Communications (Amendment) Bill 2022 – is also seeking to make telcos have separate accounts and produce different reports for all their businesses.
- •Safaricom’s M-PESA services continue to be the key cash cow for the business, contributing 42.1 per cent of the telcos revenue in the six months to 30th September 2023, up from 39.3 per cent in the same period in 2022.
“The delay in separation is due to the tax liability which is fairly significant at KSh 75 billion and we don’t know what to do with it. But we hold that the separation ought to have happened and CBK should oversight Mpesa,” CBK Governor Kamau Thugge said during a media briefing on Thursday.
The telco recorded a growth in profitability for the six months to 30th September 2023 with the Kenyan business profits growing 10.9 per cent to KSh 41.6 billion.
During the period, one-month active M-PESA customers grew by 3.1 per cent Year on Year to KSh 32.13 million. Lipa Na M-PESA active merchants grew 22.3 per cent Year on Year to 658,350, while Pochi tills stood at 405,210.
M-PESA has already catalysed financial inclusion in Kenya, increasing it from 26.7% in 2006 to 84% in 2021. Safaricom Telecommunications Ethiopia, a subsidiary of Kenya’s Safaricom Plc, recently received a mobile money license in Ethiopia, marking the first time a foreign investor has been granted such a license in the country.
“In addition to operating a telecommunication system or providing a telecommunication service as may be specified in the licence granted under section 25, a person may engage in any other business provided that such person shall obtain relevant licenses from respective regulators of any industry or sector ventured into, legally split or separate the telecommunication business from such other business and provide separate accounts and reports in respect of all businesses carried out,” reads the Kenya Information and Communications (Amendment) Bill 2022.
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