Safaricom - 2021 Sustainable Business Report

31 SAFARICOM SUSTAINABLE BUSINESS REPORT 2021 //// STANDING TOGETHER: GOING BEYOND / OUR MATERIAL TOPICS / OUR STAKEHOLDERS / KPI SUMMARY M-PESA provides agents with the ability to increase their personal income and therefore improve their livelihoods as well as that of their employees. From FY20 to FY21 the value created for agents increased by 31% and this is largely attributable to the almost equal increase in the number of M-PESA agent outlets. The True Value Assessment has identified that the most material social value created for agents by M-PESA is the social value created through increased and sustained employment of employees in agent outlets (96%). The COVID-19 pandemic has played a significant role in negatively impacting societies ability to maintain their livelihoods and financial earnings. However, with the growth of M-PESA Agents and the increased use of M-PESA in Kenya, this assessment identified that the social value of sustained and increased employment created through M-PESA agents is KSh 47.4 billion. The proportion of social value created through increased business profits for agents amounts to 4% of the total value created. This is a decrease from FY20 (18%) which is attributable to a shift in the financial proxy used for the assessment based on the primary research performed in the current period. In addition, the primary research performed in FY21 resulted in a number of shifts in the assessment of improved personal wellbeing of agents which considers both levels of stress and feelings of safety. These shifts ultimately resulted in an increase in the proportion of the total social value created by this indicator to 3%. SOCIAL VALUE CREATED FOR MERCHANTS The use of M-PESA by merchants increased by 104% from FY20 to FY21. With this significant increase in merchants using M-PESA and a shift in the financial proxy used in the calculation (based on primary research), the value created through increased and sustained employment increased to KSh 72 billion which resulted in the proportion of value created through this indicator increasing from 26% in FY20 to 95% in FY21. Previously, the most significant social value created by M-PESA for merchants was related to an increase in business profits. With reference to the primary research performed, the average business profits have decreased over time (especially during COVID-19) which impacted total value. In addition, the proportion of profits attributable to M-PESA has decreased from 30% to 21% based on feedback from the merchants. As M-PESA allows for electronic transactions between merchants and their customers, there is an increase in the sense of safety felt by merchants due to less cash being used to transact. This has been identified as one of the key drivers in improved personal wellbeing. In FY21, the social value of improved personal wellbeing experienced by merchants (due to increased feelings of safety and reduced levels of stress) was equal to KSh 346 million, almost three times more than in previous periods. SOCIAL VALUE CREATED FOR MERCHANTS (FY20 VS FY21) IMPROVED PERSONAL WELLBEING INCREASED BUSINESS PROFITS SOCIAL VALUE OF SUSTAINED / NEW MERCHANTS EMPLOYMENT 4% 73% 26% 95% 1% 1% FY21 FY20