A stockbroker at the Nairobi Securities Exchange trading floor. FILE PHOTO | NMG Bonga points purchase of Nairobi Securities Exchange (NSE) shares has been off to a slow start with Safaricom customers buying Sh600,000 worth of stocks in seven weeks.
The value of stocks bought is equivalent to 3 million Safaricom loyalty points but is just 0.015 percent of the Sh4 billion outstanding value of tokens that has remained largely unused.
The telco announced in August 9 it had partnered with the Nairobi bourse operator in a deal that will see its customers get Sh1 for every five loyalty points and use it to invest in stocks.
It was a revolution from the current arrangement where customers have been using their accumulated points for consumption needs such as purchase of phones, accessories, air tickets, shopping, fueling cars and paying education loans.
“We are trying to encourage customers to use these Bonga points to save and invest through the stocks exchange where they can get Sh1 for every five Bonga points they have,” said Peter Ndegwa, Safaricom’s chief executive.
“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.
Points redemption is crucial for Safaricom since the points are accounted for as a liability or deferred income in the telco’s books and only recognised as revenue once they are utilised by customers.
Safaricom has been trying to cut the value of accumulated Bonga points encouraging its use to exchange the points for airtime, internet data bundles and purchase mobile devices instead of using cash.
Last year it rolled out loyalty awards scheme mainly for basic food items during the height of the pandemic but only Sh400 million was used up.
This has seen the value of unclaimed Safaricom customer loyalty awards grow too hit Sh4.2 billion all-time high in the year to March compared to Sh3.9 billion the year before.
Higher value customers left their haul of Bonga points untouched even as the low-end users rushed to redeem their points.Richer customers who were less likely to face economic duress during this Covid-19 pandemic, were urged to donate Bonga Points to fellow citizens who are most vulnerable but this failed to unlock their points.The offer to buy shares associated with the wealthy with knowledge about stocks trading and with broker accounts was expected to tap this segment.Ten trading participants in […]