OUR BUSINESS PARTNERS

Our business partners are our agents, dealers and suppliers, on whom we rely both operationally and in terms of our reputation, since they help to drive transformation through our products and services. We have a tremendous opportunity to encourage sustainable practices throughout our business ecosystem, value chain and society at large by engaging with these partners. Our business partner network comprises 1,138 suppliers, 433 active dealers and 167,083 M-PESA agents.

AGENTS

Where in previous years our agents dealt mainly in airtime, data and M-PESA products, sometimes informally selling devices, in FY19 we have introduced formalised device sales and attendant sales targets.

ADDING VALUE FOR OUR AGENTS:

Financing

increased availability of financing to agent head offices by onboarding Stanbic as a banking partner
doubled weekly financing issued to 1,600 agent head offices to KSh 1 billion
introduced close float monitoring by agents’ account managers

Security

emphasised the importance of KYC, enforcing compliance by agent head offi ces, sub-agents and sub-agents’ assistants
invested in counterfeit currency detectors (UV lights) for M-PESA agent shops
security box incentive scheme, fi nancing 40% of the cost of CCTV cameras to combat fraud and theft. 1,260 cameras issued in FY19

Reward schemes

Stawisha Biashara (Enhance Your Business) promotion
enables agents to earn a point for every 1,000 transactions facilitated
Points can be redeemed by USSD for cash via their M-PESA accounts

DEALERS

Increased transparency through digitisation
Shared prosperity vision:

new business lines
potential return on investment (RoI) Increased transparency around internal processes, e.g. line activation, that affect dealers’ revenue generating activities

Continuous support programmes

Training and life skills for dealers’ staff on basic bookkeeping, shop and staff management
Branch managers equipped to handle end-to-end duties at their shops and encouraged to take up leadership roles within their areas of operation

Chanua Biz (Enlighten your business)

Encourages dealers’ direct sales agents to take up M-PESA functionality
Provides a secure and effective channel through Lipa Na M-PESA (Pay by M-PESA) to digitise and streamline collections
Allows them to go cash-free, making them far safer and reducing their insurance costs
Rewards agents with commissions for signing up new recruits, enables them to earn points (redeemable for airtime)

M-Jeki (A little boost)

Unsecured short-term loan for dealers and agents (head offi ces) to cover airtime, fl oat and device purchases
Enables smaller and emerging operators to raise extra working capital against their trading history with Safaricom

OPPORTUNITIES FOR GROWTH
The 2019 Dealer of the Year awards and Dealer Conference sessions were combined into a single event. Dealers were treated to a demonstration of opportunities across new business lines such as Masoko, DigiFarm, Home and Terminals.

Our programme to onboard more dealer vans, for which Safaricom supplies branding and recommended routes, resulted in phenomenal growth, from 200 vans in FY18 to 298 in the year under review. This will increase our market penetration into more remote areas and increase the uptake of M-PESA.

SUPPLIERS

SAFARICOM SPEND WITH SUPPLIERS

* This increase is attributable to our need to procure specialised network equipment that could not be sourced locally. We are, however, committed to growing the number and diversity of our local suppliers.

SUPPLIERS’ RELATIONSHIPS WITH SAFARICOM

During FY19, our fi nance operations changed the date on which suppliers were paid from the 15th of the month to the 10th, provided invoices were posted to the iSupplier online portal by the end of the preceding calendar month and goods or services had been delivered. Our suppliers have responded positively and are satisfied with our payments process.

We have automated and expedited our purchase orders (POs) process by introducing catalogues and “touchless” (not requiring human intervention) POs, wherein sales processes are digitally integrated. By the end of FY19, over 75 per cent of purchase orders were touchless, reducing the PO turnaround time from an average of three days in April 2018 to half a day in March 2019.

We set up a help desk with a dedicated email account to improve our engagement with suppliers. We conducted mini-forums in October and November 2019, attended by 240 suppliers, to provide feedback on issues they have raised, share our vision for sustainable business and encourage them to implement the SDGs into their own businesses.

Our independent annual partners’ forum survey, conducted by TNS Kantar, received responses from 151 partners. There was a slight dip in supplier satisfaction from 94 per cent in FY18 to 91 per cent in the year under review. An NPS score, which assessed how likely our partners are to recommend our goods and services, was introduced for the fi rst time. We achieved a score of 73.

SAFARICOM SUPPLIER PERFORMANCE
Overall our suppliers scored 80 per cent (on-target) in the year under review, two per cent up from FY18, in evaluations of 605 participating suppliers. Underperforming vendors received performance improvement plans (PIP), providing them the opportunity to do better.

ENSURING A SUSTAINABLE SUPPLY CHAIN
The code of conduct clause, 2.9 of our supplier contract, is guided by the principles of human rights, labour rights, environmental responsibility and anti-corruption, and stipulates that our partners have an obligation to sign up to the Code of Ethics for Business in Kenya. Three hundred and twenty-four out of our 335 suppliers, or 96.7 per cent, have done so. We are following up with our longstanding suppliers to ensure the remainder sign up. We are working with Global Compact Network Kenya to determine how best to align our partners with the code to transition it from a compliance concern to a way of doing business, how to move to the next level and how to sustain our membership.

We conduct continuous screening of all our potential partners for ethical issues prior to awarding any contract. Under Project Magenta we expect our supply chain to champion the decent or living wage (KSh 19,639.95) over the minimum wage (KSh 13,572.00), and we have seen this implemented in our security guarding contracts. We closely monitor our suppliers’ compliance with labour laws and other regulatory and statutory adherence. In the year under review we instituted consequences for non-compliance and contracts with three suppliers were terminated for violation.

WOMEN IN BUSINESS (WIB)

Empowering women-owned businesses can have a very significant impact on society and reducing inequalities. In the year under review we established a mentorship programme wherein experienced WIB volunteer to mentor start-ups and SMEs, providing guidance and technical expertise. Three cohorts of mentees have benefi ted and the fi rst cohort are now mentoring other emerging SMEs. Awareness of WIB is growing, and through our mentorship and capacity-building programmes we have observed a mind-shift among participating suppliers.

At the start of FY19, our active suppliers included 113 women-owned businesses. Most of these suppliers, however, fulfilled relatively low-spend needs such as stationery supplies, cleaning and cafeteria services.

In July 2018 we put out a call for applications from women-owned businesses specialising in technology. By the end of FY19 we had grown our list of active WIB suppliers to 178, and our spend with them increased from KSh 1.9 billion to KSh 2.4 billion, which represents 3.2 per cent of our total amount of goods and services purchase expenditures. We have seen tremendous growth among women-owned businesses in the technological arena; the number of WIB with the expertise to handle various scopes in technology has increased from fewer than fi ve to 50.

In FY20, we aim for 10 per cent of procurement spend to go to women-owned businesses. Various categories of specific capacity building initiatives have been conducted for the WIB, both with internal teams in supply chains and other WIB supporting partners. This means that when a specific need arises, no further prequalification assessments need to be done. The women have already been scaled up (through capacity building sessions, mentorship sessions and subcontracting to tier one suppliers) and can take up bigger, more challenging assignments.