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This research report was prepared by the Research Department of Old Mutual Securities Limited. Old Mutual Securities Limited is a securities trading company licensed by the Capital Markets Authority (Kenya) for the purpose of facilitating trade on the Nairobi Securities Exchange.

Here are our views on the news making headlines today for Kenya:
Safaricom is targeting a slice of the commission income from the Sh12 billion annual remittances sent between Kenya and Tanzania by enabling customers in the two countries to send and receive cash through M-Pesa. The partnership will involve working with a Tanzanian subsidiary of Vodafone, the UK firm which owns majority shares of Safaricom.

Our View: M-pesa continues to be a success story, especially when Safaricom is keen on expanding its platform capabilities. The company got approval from the Central bank to offer international money transfer services and this has enabled the company to access 10 new markets across the world. Lipa na M-pesa also continues to gain traction as the Company continues to enroll more merchant to the platform for the payment of goods and services across East Africa. Synergy creation has been key in ensuring Safaricom’s success story. The company actively partnered with KCB (Kenya’s biggest bank by asset base) to launch “Biashara@smart” a product aimed at empowering and growing SMEs. The company also plans to introduce bundled internet for homes and on demand TV viewing, a service that is currently dominated by Wananchi Group through its lucrative fixed internet segment (Zuku Triple Play Package).

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