Airtel bets on MSMEs amid State regulation, tax drives

The share of Airtel Money has grown 6.6 per cent, according to the latest Communications Authority (CA) industry report.

The report shows potential for growth in a market that may be construed to be saturated or nearing saturation.

One of the reasons is the removal of withdrawal codes back in February by the Central Bank of Kenya.

Financial Standard had a chat with Airtel Money Managing Director Anne Kinuthia about the telco’s plans to expand its market share, leveraging remittances and the micro, small and medium enterprises (MSMEs) in a changing regulation landscape.

From the latest CA statistics, mobile money subscriptions stood at 77.3 per cent from 75 per cent in December 2023. How is the removal of withdrawal codes likely to impact M-Pesa to Airtel transactions?

Digital payments and digital money transfers continue to be widespread in today’s economy and cut across all ecosystems. Kenyans also continue to embrace the convenience that comes with mobile money services. This breakthrough has enabled frictionless transactions across the industry and has gone a long way in enhancing convenience for customers. Many Kenyans want to undertake money transfers without having to worry about which network they are sending money or receiving from and with this enablement, we expect to see continued choice being given to customers who can now transact conveniently and with ease. We are now looking forward to fully interoperable merchant payments across the industry, which will also go a long way in giving customers choice. We are currently undertaking a significant rollout of new sites to ensure that we are bringing services closer to the people. We are investing in upgrading our network and this will increase our market penetration in areas where we were underserved

Do you have any partnerships lined up to propel your growth?

We are continuously onboarding new Airtel Money agents and increasing partnerships where our customers can conveniently access agency services, that is, depositing or withdrawing money from their Airtel Money wallets. We have more than quadrupled the number of agents we have in the market in the last two years, and we continue working on bringing our services closer to Kenyans. By continuously innovating, we are coming up with more use cases and offers for Airtel Money customers to ensure value for money. Additionally, we are continuously getting into partnerships with key partners such as our recent deal with KCB, Equity, and Co-operative Bank allowing for payments via Airtel Money to any of these bank paybills.

MSMEs are a key cog when it comes to the mobile money business. How important is the sector to the growth of your business?

Many SMEs utilise mobile money for payroll management, payments to suppliers, receiving payments from customers and even accessing credit. We continue to come up with different services and products to support MSMEs. Our paybill and till numbers are vital for businesses, especially in helping merchants track their revenues and sales. We also have bulk disbursement systems that allow businesses to make payments to employees. All these are geared toward driving financial inclusion.

To what extent do you think the decision by the government to use paybill/till numbers as virtual electronic tax receipts may affect the growth of the mobile money market?

This hasn’t been made official yet. If these guidelines are published, we will be able to review the requirements, but we remain committed to complying with all directives put forward by the regulators. 

How will you go about complying with this directive if it is implemented while increasing your market share, with businesses expected to shy away from mobile money?

When the regulation comes into effect, we will review the requirements as guided and will be able to determine how to comply. I am certain that the government will be able to take all factors into consideration as they issue the guidelines to ensure compliance.

The CA report shows your mobile money market share grew to 6.6 per cent, while that of your major rival shrunk. In such a market, where it can be argued that growth is almost hitting a plateau, how does Airtel plan to navigate this challenge?

Our aggressive investment and site rollout has been essential for us to continue growing. Our network is the key enabler of our mobile money services and given that Airtel is now making inroads in remote areas of the country and areas where we haven’t had our footprint before, we will be able to reach the unbanked and underserved populations. Cross-border transfers – according to the CBK, from abroad to Kenya stood at over Sh512 billion in 2023. This is a key area where we are looking at expansion-wise.