Image courtesy Kenyan Wallstreet What began as an act of goodwill by Safaricom to the public is now turning to a thorn. This was made clear by the telco firm that criticised the Central Bank of Kenya for extending the period for free M-PESA transactions.
Safaricom says that this was done without any consultation and could end up in a KES 19 billion loss by the end of 2020 due to the fee waivers.
The company’s outgoing chairman, Nicholas Ng’ang’a, spoke on Thursday to shareholders at Safaricom’s virtual annual general meeting saying that the firm has already suffered greatly from the unilateral decisions made by regulators.
And while Mr Ng’ang’a refrained from mentioning names, the context of his speech clearly points to the CBK. This is because the Central Bank is the one responsible for overseeing the firm’s mobile money service. The regulator was also the one that launched the waiver deal in a bid to offer financial relief to Kenyans amid the COVID-19 pandemic.
The agreement that had kicked off on 16th March was set for 90 days which initially came to a close at the end of June. By then, Safaricom had already been reporting an average monthly loss of KES 1.7 billion.
The CBK was then quick enough to extend the directive for another whole 6 months. The order will now be in effect till December 31 st 2020. The removal of charges on M-PESA transactions affects those worth up to KES 1,000. Bank-to-M-PESA transactions were also made free in order to encourage Kenyans to take up digital modes of payment rather than solid cash.
But it could just be a matter of time before the whole directive has to be addressed by both parties.