• The telco has reported low Lipa Na M-PESA merchants’ activities.
• Affected areas include tourism, restaurants, retail and wholesale sectors - a reflection of weak business affected by the coronavirus.
Image: COURTESY
Small and Medium-sized Enterprises are the hardest hit as Covid-19 takes a toll on the economy and they need support, Safaricom CEO Peter Ndegwa has said.
In an interview with Classic FM on Wednesday, Ndegwa said merchant activities have remained significantly low in the tourism industry, restaurants, retail and wholesale sectors, a reflection the coronavirus hit.
“We have seen on Lipa na M-PESA that merchants’ activities are down,” Ndegwa said.
The company has more than 173,000 Lipa na M-PESA merchants countrywide in all major sectors.
During the second quarter of this financial year, the value of customer-to-business money transfers on M-Pesa stood at Sh293.8 billion, the Communications Authority reported. Business-to-business transactions during the period amounted to Sh859.6 billion.
“Small companies are more affected than large companies. We have to pay attention to small companies,” Ndegwa said.
He said the telco, in partnership with other corporates including banks and other like-minded entities, is ready to support SMEs recover from the effects of Covid-19.
Support includes securing working capital and digital tools to enable businesses to re-start.
“We are happy and willing to support anyone who calls themselves a small business because we believe that is the heart of this country,” Ndegwa said.
He noted SMEs account for about 80 per cent of the country’s employment, hence, they need to be supported to survive post-Covid-19.
Meanwhile, the Nairobi Securities Exchange-listed telco has reported increased use of cashless payment and mobile money transfers as people avoid cash to reduce the spread of the virus.
“We have seen a lot of transfers on M-Pesa although economic activities are down,” Ndegwa said. "Cashless buying is up.”
In March, the telco waived charges for transactions of as much as Sh1,000 to reduce the costs and save users a few shillings to put into other uses.
On Wednesday, Ndegwa said at least 20 million Kenyans are benefiting from the free transaction services, which were to run for 90 days.
Launched in March 2007, M-Pesa has more than 22.6 million active customers and more than 167,000 M-Pesa agents countrywide.
The value of person-to-person money transfers between October and December (Q2, 2019-20) was Sh684 billion, CA data shows. M-Pesa recorded the highest market share of mobile money services at 98.8 per cent.
Ndegwa said Safaricom supports the government's measures to cushion the economy and businesses from the effects of Covid-19.
National Treasury CS Ukur Yatani said Covid-19 is expected to negatively impact the economy through "reduced demand for goods and services, low levels of production, reduced importation of goods services and ultimately leading to job losses".
He said the most-affected sectors include trade, tourism, transport and storage, agriculture, manufacturing and construction.
(Edited by V. Graham)