A Safaricom shop in Nairobi. FILE PHOTO | NMG Households struggling under Covid-19 pandemic-driven economic slowdown can now use Safaricom Bonga points to settle electricity bills.
A deal between Kenya Power #ticker:KPLC and Safaricom #ticker:SCOM will now see customers use the loyalty awards to purchase power after default rates neared 10 per cent in the three months to June, exposing over half a million customers to disconnection.
Kenya Power managing director Bernard Ngugi said the move was part of the company’s strategy to help households manage the tough economic times brought about by Covid-19 with plans underway to increase consumer education on efficient use of energy.
“We have entered into a partnership with Safaricom through which our customers will be able to pay for power through Bonga Points. In addition, we plan to amplify campaigns to educate our customers on efficient power use in order to manage their bills during these tough economic times,” he told the Business Daily yesterday.
Last month, Energy Cabinet Secretary Charles Keter revealed that more than 600,000 customers or at least 8.7 per cent had defaulted on power bills, costing Kenya Power some Sh3.9 billion in unpaid bills.
The default rate had risen sharply in the three months to June, coinciding with the period when the virus was first detected in Kenya.
The move to use Bonga points will also help Safaricom reduce the loyalty awards backlog that had hit Sh3.94 billion in the year to March 2020, up from the previous year’s Sh3.85 billion.
Bonga points are accounted for as a liability or deferred income in the telco’s books and only recognised as revenue once customers utilise them, hence the relief when they are redeemed.
The power purchase provision now adds to the telco’s various channels for customers to use the resource such as paying for air tickets, shopping, fueling cars and even repaying education loans.
About one billion points valued at Sh301 million were redeemed in the two months to June 4 through an initiative dubbed Bonga for Good launched on April 3 to help customers purchase goods and services in the wake of the economic disruption brought by the Covid-19 pandemic and local measures to slow down its spread in Kenya.