M-Pesa

M-PESA continues to be a key player in the payment ecosystem, driving financial inclusion in Kenya. While we saw a slowdown in business activity from the macroeconomic effects exacerbated by the election period in the first half of the year, we saw increased momentum in half two.

M-PESA

Revenue growth during the year was attributable mainly to M-PESA, mobile data and fixed revenues.

  • M-PESA revenue was up 8.8% YoY, supported by increased usage and growth of chargeable transactions per customer.
  • Mobile data grew double digit by 10.6% driven by increased usage evidenced by a 53.8% growth in the average Gigabytes per user to 3.57GB.
  • Fixed Enterprise and Fibre-to-the-Home (FTTH) revenues grew 21.4% and 17.9% YoY respectively driven by growth in customers and usage.
  • Our rate per MB has declined by 24.5% in the year to 6.7 cents driving affordability for our customers.
  • As we focus on growing penetration of 4G devices, we are delighted to see that of the smartphone users that grew by 10.0% to 20.3 million, 65.1% or 13.2 million are active on 4G devices.

Price Reduction Driving Increased Fintech Velocity

Since FY2021, we have introduced a number of measures to reduce fintech costs in order to drive affordability, and thereby, growth.

30%

of M-PESA transactions

KADOGO

Zero-rated charges for transaction ticket sizes of 100/- and below for paybill & P2P up to 200/- for Buy Goods

80%

Cost reduction of draw-downs

AFFORDABLE CREDIT

50% reduction in Fuliza cost of a credit, First 3 days have a waiver on transactions below 1,000/- on maintenance charge & 50% reduction in daily maintenance tariffs

50%

Average cost reduction across all transaction bands

TARIFF REDUCTION

46% reduction in P2P charges (2021), 47% reduction in paybill charges (2023), 61% reduction in B2C charges (2023)

M-PESA – Overall Performance

With the return to charging for bank to and from M-PESA in Q4, we were able to record a double-digit growth of 12.2% YoY, effectively bringing the H2 growth to 9.0% from the 8.7% reported at H1. Overall, we managed to record a growth of 8.8% YoY. We took a decision to support our customers in the tough economic environment they are facing, by driving affordability. The resulting 8.8% growth in M-PESA revenue is attributable to:

  • Personal Payments which include transfers and withdrawals – revenue grew 8.0% YoY driven by organic customer growth.
  • Business payments which include C2B, B2C, Lipa Na M-PESA and B2B, saw a growth of 13.3%, attributable to aggressive merchant
  • acquisition and a return to charging.
  • Global payments continued to perform strongly, growing 17.0% YoY enabled by growth in remittances.

M-PESA Revenue (Kshs Bn)

ARPU & Chargeable Transactions per one-month active customers

M-PESA Usage

During the year under review, we continued to invest in, and drive the innovation of, new products, as we increased our service offering to customers, with 21 billion transactions, valued at KShs 35.9 trillion, channeled through the M-PESA platform.

  • Velocity in the ecosystem continued to grow with total value and volume of M-PESA transactions growing 21.4% and 33.5% YoY respectively.
  • Chargeable transactions per one-month active customer grew by16.2% YoY in FY23 to 23.54 transactions up from 20.25 transactions in last year

M-PESA Super App

The M-PESA Super App continued to play a strategic role in digitising the payments platforms and the leveraging of technological innovation. The Consumer App, in addition to transactional capabilities, comprises 61 Mini-Apps that offer convenience to our customers and e-commerce. During the year under review, these Apps have continued to record strong traction. The Consumer Super App recorded;
• Over 7.4 million downloads with 1.2 million active revenue-generating customers
• KShs 6.7 billion in M-PESA revenues, contributing 6% to M-PESA revenue
• Support for over 489.1 million transactions, with a value of KShs 1.3 trillion
• 34.1 transactions per one-month active customer
The Business Super App also recorded increased momentum with:
• Over 500,000 downloads and over 251,600 active merchants
• KShs 658 million in revenues traction.

M-PESA Global

418

FY23

395.73

FY22

5.6%

% YoY

31.72

FY23

31.04

FY22

2.2%

% YoY

2.84

FY23

2.47

FY22

14.6%

% YoY

Looking Ahead

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ARPU growth Expansion to new customer demographics such as Gen Z, Pochi;matching value propositionto different demographics;digital super app

Accelerated activemerchant acquisitionwith enhancement of VAS (e.g., lending, payroll and loyalty programs
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Deployment of existing and new credit offerings (e.g., loans, overdraft, BNPL) through a platform mode

Introduction of new financial services product marketplace for insurance and micro-wealth management
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Introduction of new financial services product marketplace for insurance and micro-wealth management