I like that they are doing good with that money, shida ni financials za MPESA Foundation are not open to the public. No one knows how much they earn, how much they spend, what they spend on… except a small group of mzungu in the board of trustees(I also have an issue here, how comes trustees are mostly white)
At the end of 2012, MPESA had a cash balance of around 200billion(that was the last time they published that figure), if we assume 7% interest rate earned on that balance, that would mean MPESA Foundation that year had an income of 14billion. (To put into perspective the judiciary spent 12billion that year) I wonder how much they are now earning given how much growth MPESA has had since then.
Break down that 200 billion. That’s its 18 million subscribers money that Safaricom can’t use. However your account becomes dormant after 1 year if you don’t use it on network or transact in mpesa. After 5 years whatever balance is in the account is now moved completely from Safaricom to unclaimed assets registry under government Treasury. For those 4 years of dormant account status it can legally earn interest but Safaricom can’t take that as revenue. So that’s where Mpesa foundation comes in to invest that money back to the public. I can have 70,000 in my mpesa for a year but it doesn’t get an interest unless I subscribe for a lock account. If I don’t do any transaction on it or I don’t use the line for anything in the network, then within 120 days the line credit validity expires and it goes dormant. Another 120 days without use and line is locked. 60 days Safaricom tries to reach you. If not its now declared dormant and balanced moved to registry. The line is now free to be resold to public with zero balances.
No, its not that interest we are talking about, that goes to treasury via the unclaimed assets authority.
Mpesa works this way, the agents deposit a certain amount with safaricom(what we call float) then their balances are then credited and hence forth they can accept deposits from clients and transfer this “float” to them.
What you will notice is that safaricom ends up having in its posession very large amounts of cash as deposits from agents. The interest from this cash is what safaricom is not allowed to use as income. Thats why mpesa foundation was created to use this money.
My roosal is, since this money is generated by cash deosits from the public, the least they could do is open their a/cs to the public