News Column

Safaricom Banking On Marketing to Retain M-Pesa Agents

July 15, 2014

James Waithaka

Success of Safaricom's lifting of agent exclusivity restrictions, which comes amid low average earnings per agent, is hinged on their ability to marshal extra capital for other services.

Nzioka Waita, the telecom's director for corporate affairs, said it has already communicated to agents of the recent development allowing them to stock other services that will complement incomes.

"All our agents are aware (about lifting of exclusivity restrictions). We communicate to them and the sales team gets in touch with them on a monthly basis," Waita said.

The move means M-Pesa outlets can stock up other financial products previously deemed as competing directly with the service, such as hosting bank agency simultaneously.

Waita said this will however depend on how well the other options are marketed and commission structures.

"You don't stock anything that is not moving. If you are not paid commissions well and if the product is not marketed well, you won't take it up - you can't just tie up capital," he said.

Safaricom's lifting of exclusivity restrictions on its agents is anticipated to shore up their earnings and boost profitability.

Last month, a report by Helix Institute of Digital Finance - which is backed by MicroSave, Bill & Melinda Gates Foundation, UNCDF and IFC - based on an agent survey in September showed Kenyan agents earned a lower median monthly profit compared to their East Africa peers, despite recording more transactions.

The report stated that Kenyan agents, pre-dominantly M-Pesa, were taking home $70 (Sh6,134) less than Uganda's$78 (Sh6,835) and Tanzania's$95 (Sh8,325).

M-Pesa agents earn commissions from taking customer deposits and withdrawals. The agents earn Sh4-190 per transaction for deposits depending on the band, and Sh0-200 for withdrawals.

Safaricom says it reviewed the commission scheme to reward agents better for high value transactions "and as an incentive to hold adequate float".

Its 81,025 agents earned Sh10.68 billion in commissions in the year ended March 31, which was 40.3 per cent of the M-Pesa revenues totalling Sh26.56 billion in the period.

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Source: AllAfrica

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