Safaricom PLC CEO, Peter Ndegwa (right), with Nairobi Securities Exchange (NSE) CEO, Geoffrey Odundo, moments after signing a partnership between the two organizations. Also present is NSE Chairman, Kiprono Kittony and Central Depository & Settlement Corporation (CDSC) Head of Strategy, Research, Legal and Compliance, Hilda Njeri. Safaricom Bonga points, the loyalty program by the telco, is one of the most versatile products that they offer to customers due to its variety of applicability . Customers can redeem these Bonga points to facilitate transactions from simple items like data, voice, and gadgets, to extremes like plane tickets, loan repayment, and recently, to invest in company stocks at the National Securities Exchange (NSE).
However, it seems the number of customers who have redeemed their Bonga points for stocks purchase at NSE has been lower than expected. Safaricom and NSE announced their partnership at the beginning of August, excited to offer this as an additional avenue for economic empowerment to their users.
Safaricom announced that their customers had accumulated over 16 billion points, and only 3 million of these loyalty points were converted to stocks in the seven weeks that this program has been operational. This translates to just KES 600,000 in stocks, because their equation reads 5 Safaricom Bonga points to 1 shilling of investment at the securities operator.
It is important to the telco that their customers redeem Bonga points because then, the company will be able to add this in their books as added revenue. 0.015 percent conversion of the unused tokens is a slow start in this trading program and the outstanding amount still remains as liability.
Last year, Safaricom tried to encourage users to exchange their Bonga points through basic food items, but only Bonga points worth KES 400 million were used. It is noted that richer customers with the highest points rarely have the motivation to use them, and only those low-end users would rush to exchange theirs in loyalty award schemes.
The partnership with NSE is a way of enticing these rich customers who had again earlier failed to donate their points after Safaricom had requested them to do so. Peter Ndegwa, the Safaricom CEO, is hopeful that their efforts will yield fruit.
“So far we have seen Sh600,000 worth of shares being purchased as a result of that and we are hopeful there will be a significant increase into the future,” he said.
If you are one of these rich customers […]