The Central Bank of Kenya (CBK) reiterated its commitment to the plans of separating M-Pesa from other Safaricom businesses, with a meeting scheduled with the telecommunication company’s board in the near future.
In 2022, CBK initiated discussions with telecommunication companies to separate mobile money activities from other businesses to improve governance and reduce shocks on bank-related transactions. A bill currently before Parliament – the Kenya Information and Communications (Amendment) Bill 2022 – also aims to mandate telcos to maintain separate accounts and produce distinct reports for all their operations.
Safaricom’s M-PESA services continue to be the primary revenue driver for the business, contributing 42.1 percent of the telco’s revenue in the six months to 30th September 2023, up from 39.3 percent in the same period in 2022.
CBK Governor Kamau Thugge addressed the delay in separation during a media briefing, citing a significant tax liability of KSh 75 billion as a key challenge. Thugge emphasized that despite the tax issue, the separation should proceed, with CBK assuming oversight of M-Pesa.
Safaricom reported a growth in profitability for the six months to 30th September 2023, with profits from its Kenyan business increasing by 10.9 percent to KSh 41.6 billion.
During this period, one-month active M-PESA customers rose by 3.1 percent year on year to KSh 32.13 million. The number of Lipa Na M-PESA active merchants grew by 22.3 percent year on year to 658,350, while Pochi tills reached 405,210.
M-PESA has significantly driven financial inclusion in Kenya, increasing it from 26.7 percent in 2006 to 84 percent in 2021. Safaricom Telecommunications Ethiopia, a subsidiary of Kenya’s Safaricom Plc, recently secured a mobile money license in Ethiopia, marking a historic milestone as the first foreign investor to receive such a license in the country.
