Safaricom in new plan to clamp down hard on serial defaulters

It says the tool should be able to provide real-time credit scoring and risk analysis of customers based on their payment history and creditworthiness. It should also have "ageing reports" that provide a snapshot of the current status of outstanding debts, organised by the length of time they have been overdue.

"These reports can help identify which accounts are the most delinquent and require immediate attention," says Safaricom in the internal documents seen by The Standard.

The debt management tool will also have customer segmentation reports that provide "insights into customer behaviour patterns and payment history, helping to segment customers by various criteria such as payment behaviour, creditworthiness, and demographics."

"These reports can help tailor collections process to better serve the needs of different customer segments," says Safaricom.

The telco accrues different types of debts such as digital lending, postpaid billing debt as well as credit sales debt.

Safaricom says such debt is carried in different systems of its operations.

"As part of our commitment to effective credit and collections management, we are seeking a provider for a comprehensive and dynamic debt management system for our debt portfolios," it says.

Loan payments

The plan by Safaricom comes as consumers are expected to start to fall behind on their loan payments as the economy softens.

Safaricom's new debt management tool will provide real-time credit scoring and risk analysis. [File, Standard]

Safaricom reckons the start-ups will help it venture and scale up speedily into new business lines targeting the hugely untapped agriculture, education and health sectors, in turn, earning it new revenue streams.

This is as the leading telco races to diversify and grow new revenues amid slowing profit growth.

The telco posted a 22.2 per cent decline in net profit for the full year ended March 2023, the third consecutive drop in earnings, attributed to heavy capital investments in Ethiopia and a tough business environment.

Profit stood at Sh52.48 billion, down from Sh67.49 billion posted in the previous period.

Safaricom's M-Pesa, launched in Kenya more than a decade ago is one of the most popular modes of payment in Kenya.

M-Pesa, started in 2007, has evolved from a basic mobile money transfer application into a fully-fledged financial service platform, offering loans and savings in partnership with local banks, plus merchant payment services.