Safaricom 2018 Sustainable Business Report

52 INTRODUCTION OUR BUSINESS OUR MATERIAL TOPICS STAKEHOLDER ENGAGEMENT 2018 SUSTAINABLE BUSINESS REPORT It appears that the political uncertainty may have counteracted the challenging economic conditions to an extent and that the elections may have stimulated a considerable amount of entrepreneurial activity, as well as prompting people to travel, to purchase certain goods and foodstuffs, and even to stockpile funds on the platform itself. Deepening financial inclusion Aside from the important financially-enabling role M-PESA plays in the lives of more than 20 million Kenyans, two of the specific ways we monitor its impact on deepening financial inclusion are through the M-Shwari micro-finance savings and loans service, which helps underserved Kenyans access banking facilities and credit, and the Lipa Na M-PESA merchant service, which supports and enables entrepreneurial and SME activity across the economy. The reduction in M-Shwari customers during the year is a reflection of the increasingly competitive nature of the micro-finance market. The market has entered a natural period of volatility and growth as it matures, with companies that have larger appetites for risk entering the market and customers evaluating different products to suit their needs. The significant growth of deposits can be attributed to more M-PESA users moving money between their M-PESA and M-Shwari accounts in order to maximise the benefits of each. Our Lipa Na M-PESA merchant service enjoyed solid growth this year, which we attribute to the 50% reduction on all merchant fees and the extension of the M-PESA Kadogo (no charges on transactions under KES 100) rate to customers as well as merchants. 102,337 390.6 30,167 89.9 44,554 185.2 Lipa Na M-PESA Merchants Lipa Na M-PESA Transactions (KES billion) 58,167 284.3 Lipa Na M-PESA FY15 FY16 FY17 FY18 106 80 213 83 FY15 FY16 FY17 FY18 3.3 5.5 2.1 3 8.1 10 3.9 M-Shwari 100 50 150 200 0 -100 AMOUNT (KES billion) M-Shwari Customers (million)* 5.3 * 30-day active M-Shwari Loans M-Shwari Deposits