Safaricom PLC has announced that its flagship mobile money platform, M-Pesa, will undergo a scheduled system upgrade on Monday, September 22, 2025, between 12:30 am and 3:30 am.
In a notice to customers, the telco said the three-hour maintenance window is part of ongoing efforts to improve the reliability, security, and performance of M-Pesa services.
“For 18 years, M-Pesa has continued to transform lives across Kenya, connecting you, our customers, to opportunities every day. To support this and meet our promise to offer always-on, safe, secure, and worry-free financial products and services, we will be conducting a scheduled system upgrade,” Safaricom said in a statement.
During the upgrade period, all M-Pesa services, including airtime purchase, will be temporarily unavailable.
The company emphasised that the timing has been carefully chosen to minimise inconvenience and urged customers to plan transactions in advance.
Safaricom also apologised for the disruption and expressed gratitude to customers for their continued trust, noting that such upgrades are necessary to sustain M-Pesa’s role as a backbone of Kenya’s digital economy.
Launched in 2007, M-Pesa now serves over 32.1 million customers in Kenya alone and has been a key driver of financial inclusion, raising access to formal financial services from 26.7% in 2006 to 83.7% in 2021.
The platform generated Sh139.9 billion in revenue in 2024 and continues to expand globally, with a footprint in more than 170 countries and over 70 million active users.
The mobile money service also supports over one million businesses and agents across markets including Kenya, Ethiopia, Tanzania, Mozambique, the Democratic Republic of Congo, Lesotho, Ghana, and Egypt.
Safaricom has outlined specific steps customers can take to increase their Fuliza loan limits amid growing frustration from M-PESA users experiencing stagnant borrowing capacities for extended periods.
The telecommunications giant’s clarification comes after numerous customers expressed concerns about unchanged Fuliza limits, with some reporting limits as low as KSh 100 to KSh 300 that have remained static for over two years despite regular usage.
Key Requirements for Limit Increases
According to Safaricom’s official guidance, customers seeking to grow their Fuliza limits must meet several criteria:
1. Network Tenure Requirement
Customers who have been on Safaricom’s network for less than six months will have a zero limit. This represents a fundamental barrier for new users seeking immediate access to higher credit facilities.
2. Consistent Service Usage
To grow Fuliza limits, customers need to continue using Safaricom and M-PESA services regularly and repay their Fuliza facility on time by topping up their M-PESA account. This includes maintaining active engagement with various M-PESA services beyond just the overdraft facility.
3. Timely Repayment History
The limit will be refreshed upwards or downwards depending on usage and timely repayment of the facility. This dynamic adjustment system means customers with poor repayment records may see their limits reduced rather than increased.
Maximum Limits and Transaction Patterns
The maximum Fuliza limit can reach KSh 70,000 for customers who consistently deposit and withdraw large amounts from their M-PESA accounts. This ceiling represents the highest overdraft facility available through the service.
The company emphasizes that limit increases are not guaranteed and depend heavily on individual customer behavior patterns, including transaction frequency, amounts, and repayment consistency.
Warning Against Fraudulent Services
Safaricom has also warned customers about fraudulent Facebook pages claiming they can artificially increase Fuliza limits. Pages such as “Fuliza Increment loans,” “Fuliza Increase Limit,” and “To increase fuliza limit from 0 to 50,000” have been identified as fake, with the company emphasizing that no third-party service can manipulate these limits.
Customer Concerns
Recent complaints highlight the broader challenges facing Kenya’s digital lending sector. Some customers have reported transacting over KSh 300,000 monthly while maintaining minimal Fuliza limits, raising questions about the algorithm’s sensitivity to high-volume users.
The Fuliza service, launched as a partnership between Safaricom and NCBA Bank, has become a critical financial lifeline for millions of Kenyans since its introduction. The overdraft facility allows M-PESA users to complete transactions even when their account balance is insufficient, with automatic repayment when funds are deposited.
The concerns over Fuliza limits come at a time when digital lending in Kenya faces increased regulatory scrutiny. The Central Bank of Kenya has implemented stricter guidelines for digital lenders, emphasizing consumer protection and responsible lending practices.
Safaricom’s clarification represents an effort to manage customer expectations while maintaining the risk management protocols that govern the Fuliza service. The company’s algorithmic approach to limit setting reflects broader industry trends toward data-driven credit assessment.
How to Check and Manage Fuliza
Customers can check their current Fuliza limit and opt into the service by dialing *334# and selecting the Fuliza M-PESA option. The service requires users to be M-PESA registered customers with active Safaricom lines.
The service charges include a one-time 1% access fee and daily maintenance fees applied at midnight, along with the standard 20% excise tax on interest charges.
As Kenya’s mobile money ecosystem continues to evolve, the balance between accessibility and risk management remains a key challenge for service providers. Safaricom’s guidance on Fuliza limits reflects this ongoing tension between customer demand for higher credit facilities and the need for prudent lending practices.
For customers seeking to increase their limits, the company’s message remains clear: consistent usage, timely repayment, and patience are the only legitimate pathways to higher Fuliza credit facilities.
In a landmark ruling that is expected to disrupt the peace of many banks in Kenya, the High Court on March 15, 2024 upheld the decision of the Small Claims court in which a customer successfully sued Kingdom Bank a subsidiary of Co-operative bank after losing Sh50,600 he erroneously credited to an M-Pesa till number that terminated in an account domiciled at the bank. The court held that the bank was liable for the loss.
The High Court judge ruled that despite Kingdom Bank having demonstrated that money was withdrawn before the affected customer reported the erroneous transaction, it failed to show that it tried following up with the customer who withdrew the money to stop the fraud.
“The bank was under a duty to demonstrate that it took the necessary steps in recalling the money. However, all that the bank did was to file statements to show how the transaction was undertaken or how the money was withdrawn. There was nothing to show that the bank called for the money from its customer. No evidence of its intention to aid the recovery of the money,” said Justice Mabeya, the presiding judge of the Milimani High Court Commercial and Tax Division.
“While I admit that the bank has a duty to protect its customer’s interests, in this case, the customer fraudulently withdrew money that did not belong to it. The bank had a duty to ensure that it did not aid a fraud and it is not enough to state that the account did not have sufficient funds.”
The case of Kingdom Bank and Alice Wanja Wanjohi
In court papers seen by Kenya Insights, Ms Wanja erroneously sent a total some Ksh50,600 to the Kingdom-linked MPESA till.
She reached out to Safaricom upon realizing the mistake informing them of the erroneous transaction but was instead instructed to reach out to the Bank for assistance.
“On 16/8/2022, a day after the transaction, Safaricom informed the respondent that the reversal request had been transferred to the appellant for resolution,” read the court papers.
On reaching out to the Bank, Wanja was informed the money had already been withdrawn by the receiving customer and could not be recovered.
The Bank produced a bank statement showing that its customer withdrew the funds on the same day the amount landed in the account.
Dejected, Wanja went on to sue the Kingdom Bank at the Milimani Small Claims Court, arguing that the lender acted in breach of care.
She pointed out that the Bank failed to stop a fraudulent transaction and in turn shielded its customer.
The High Court finding now raises the bar of the responsibility of banks in protecting the interests of customers who are not even their own.
Banks will be held responsible for loss of cash erroneously sent by clients to unintended Safaricom M-Pesa tills numbers, which terminate into accounts held by the lenders.
The High Court has held that banks will have to demonstrate that they took all the “necessary steps in recalling the money” to stop their clients from illegally profiting from such erroneous transactions or be held liable for the losses suffered by affected M-Pesa users.
This could open up banks to thousands of lawsuits involving M-Pesa customers who accidentally send money to the wrong till numbers terminating in banks and end up losing the money amid the tedious process involved in requesting for reversals.
Safaricom has over 606,000 enterprises using its payment service, Lipa na M-Pesa, to accept payments for goods and services, pointing to the popularity of the service that transacted Sh1.63 trillion in the financial year ending March 2023.
Detectives will now have access to M-Pesa accounts belonging to embattled Kilifi Pastor Ezekiel Odero who is under probe over alleged money laundering and potential links to cult leader Paul Makenzi.
This is after Mobile service provider, Safaricom complied with a court to disclose pastor Ezekiel’s M-Pesa statements and those of his church
Safaricom senior manager and liaison officer, Weldon Syongok, told the court that all financial statements with respect to seven Mpesa accounts have been handed over to the investigating officer Chief Inspector of Police Martin Munene.
Safaricom senior manager and liaison officer Weldon Syongok
The DCI on May 8 obtained orders compelling Safaricom and five banks to supply account transactions of Pastor Odero and his New Life Church and Kilifi International School.
Through Munene, the police sought summons claiming that Safaricom is yet to comply with the orders even after it was officially served with a court order to allow them access to the books accounts of the M-Pesa lines belonging to Odero.
Syongok, however, told trial magistrate, Ben Ekhubi, that the documents were bulky and the information required by the investigating officer was backdated from 2017 to 2023 and it was therefore not possible to download the statements within a short period of time.
Last week, the court directed Safaricom to provide the information by Tuesday at noon.
Shakahola massacre
Elsewhere, Mijikenda Kaya elders have urged the government to deregister cult-like religious institutions that take advantage and prey on vulnerable Kenyans to prevent the recurrence of incidents like the Shakahola massacre.
The elders said allowing preachers like Paul Mackenzie to propagate cult-like teachings was a threat to the lives of Kenyans.
The elders led by Saidi Chitanda, were speaking in Marafa during a meeting attended by Magarini MP, Harrison Kombe. The legislator, on his part, condemned the Shakahola tragedy, saying proper mechanisms should be put in place to prevent a recurrence of similar incidents.
Presidential candidate Reuben Kigame is unhappy following his long battle for transparency against Safaricom after losing money in a scandalous way. Below is his narration courtesy of his Facebook page.
SAFARICOM MPESA IS NOT SAFE! YOU CAN LOSE YOUR MONEY WITHOUT TRACE!
By Reuben Kigame
“I wish I never had to go public with this! I wish everyone, including Safaricom, would believe that my coming out to warn on this is inevitable. It’s not good for someone to divulge details about their personal life at this level, but I feel this is necessary. So, read, tell Safaricom and be warned. Here we go. Be patient and follow to the end:
Let me preempt an important question many of you may be asking. Am I able to use a phone and transact on MPesa as someone with visual challenge by myself? The answer is “Yes.” Now that we have this out of the way, read carefully:
Shortly after Midnight, the morning of 18th November, 2021, at 12:33 A.M. my colleague sends me 10,000 shillings for my flight to Nairobi because of an urgent meeting that had come up. In the morning at 6:43 A.M. I sent kshs6,800 to Jambo Jet for my ticket. My MPesa balance read kshs3442.95. My team drove me to Eldoret International Airport where I was handed over to the Airport security for the scanning of my bags and escort to check-in. The routine procedure was smooth and fast. I handed in my luggage, customarily removing my laptop and putting it on the tray together with my phone, belt and watch. I was quickly helped onto the other side of the scanner and handed my items including my phone. Because I was getting late for the flight, everything was done pretty fast. … I was escorted to board and I left for Nairobi.
At JKIA I was received by the ground crew and security and handed over to my team which was waiting at the VIP parking. We drove off and proceeded to the venue of the meeting. Along the way, my Assistant says it is important for us to stop and fuel. I told him we were in a hurry and that I did not have enough money for the day’s events but that I could use my MPesa to put a little fuel to save us on time. We pulled into a gas station and I told him to fuel. Because it was not our favourite petrol station, we agreed we can put in kshs1000 and then fuel later. When I sent the money to the Till number provided, I was greeted by a big shock: The message read “failed. There You do not have enough money in your MPesa account to pay ksh1000.00 to Total South C.” and that my MPesa balance was141.95 shillings.
The mystery was a transaction that took place at exactly 7:11 the same morning, while I was checking in at the airport in Eldoret. The transaction read:
Pki7suusdd confirmed. Ksh3,230.00 sent to Mike Isalamba 0769142199 on 18/11/21 at 7:11 AM. New MPesa balance is Ksh141.95. Transaction cost, Ksh51.00. …
WHO MOVED MONEY FROM MY PHONE TO MIKE ISALAMBA, someone I do not know? Someone I have not interacted with? Someone not at the airport, following investigations? Who is he? Who accessed a phone that was in my custody all the while? Since I was being helped by Security, I needed to check in. Once we boarded, I put my phone off, as is required. Before you think I am joking, I have consulted and followed up with the Airport Security at Eldoret International Airport and they have reviewed the CCTV footage carefully and confirm they can see me and all my movements including the check-in and also confirm that they do not see me or anybody using my phone at the time the incident happened.
So why do I put everything at Safaricom’s desk and warn you about MPesa safety?
When I got the message that I did not have enough money on my phone and saw the mystery transaction, I immediately called Safaricom Customer Care. They told me they had received the info and had escalated the matter to their anti-fraud department and that Safaricom would get back to me within 48 hours. They did not and so, about 10:00 A.M. on Saturday, 20th November, 2021, I called again and this time I was told Safaricom would get back to me within two hours. They did not. On Monday, 22nd November, 2021, I called in the morning to find out the progress. I was told by the Customer Care that the Issue was still pending and that someone would call me by end of day. Nobody did. I called the Eldoret Safaricom shop and reported the case on the same day and they told me they were following it. Two days later, on the afternoon of 24th November, I called again and I was advised just to be patient and that the Issue was still being looked into. I asked why all the previous promises had failed and told I just needed to be patient. The next day, 25th November, I felt it necessary to report the incident to the police and so I filed the case at Naiberi station in Eldoret. I escalated the information to the Airport Police Station and decided to wait.
Well, I decided to call one more time this afternoon before going public. I was told to wait on the line. I did. The next thing I noticed, the Safaricom automated service was asking me to rate the service I had received, whether I was served well, and, all, at the scale of 1-10 whether I would recommend Safaricom to someone else.
Well, you can imagine how I graded Safaricom!.. am I a patient person? Maybe not!
Meanwhile, my call to Mike Isalamba received the usual, “cannot be reached … we have notified him…” and my text inquiring about the same to him also goes unresponded to. I contacted him just a couple of days ago, having taken this long to give Safaricom the maximum time to help me.
Nearly one month after the incident, a digital company cannot tell me how someone knew exactly how much I had left on my MPesa to be able to withdraw the maximum amount. They cannot tell me who Mike Isalamba is. They have not refunded my money and the inconvenience and embarrassment caused. They cannot explain why the matter could not be resolved in 48 hours. Nobody has talked to me.
Conclusion: You can lose money on the Safaricom MPesa App without trace for nearly a month or more. Do I say this because I hate Safaricom? No. Do I have anything against the company? No. Is my money lost under their watching eye? Yes. Do you have a reason to fear? Yes.”
Sounds like a good case for litigation against Safaricom. It is the only way the company can be held accountable for its actions. Any financial system thrives on trust and Safaricom should know that without such it cannot succeed. Regulators including CBK and CA should be seized of this matter and act expeditiously to restore consumer confidence. The overreliance on MPesa by the country should also be re-examined.
An innovator has lost a bid to stop Safaricom PLC from further launching a mobile application he claims to have been his idea.
Justice Grace Nzioka dismissed the case by Jonathan Murangiri Gikabu who wanted to block Safaricom from further launching the Mpesa I Tap service or exploiting the said concerning the information about the innovation.
“I find the Plaintiff has not proved its case as required under the law and I decline to grant the orders sought,” ruled Judge.
The judge found that find that in as much as there may be a possibility that Safaricom PLc may have incorporated some of his components in its product, there was need to provide proof.
“It is not a matter of perception or morality. Of course, it may be unprofessional to do so or morally wrong. But from the legal point of view, the Plaintiff bore the burden to prove the same,” said Judge Nzioka.
Murangiri had sought for an award of a total of Sh209 million.
“First and foremost although, these amounts include a sum of Kshs 9.4 million incurred on the innovation, that being a specially damage claim should have been pleaded. It was not. However, an award of damages is based on proved liability,” the Judge said.
Murangiri had sought to restrain the telecommunications company from further launching Mpesa I Tap service or otherwise exploiting the innovation.
He further sought an inquiry as to damages for breach of confidence or alternatively, an account of all profits made by Safaricom from use of the said confidential information or innovation.
“An order of appointment of a Receiver to collect and receive all the profits made by the defendant from the use of the confidential information or innovation of the plaintiff and an order for giving of proper directions for that purpose,” Murangiri urged the court.
He also sought the court to order for payments of all sums found to be due to him plus interests.
He argued that on or about September 2011, he started working on building blocks of NFC Mobile Payment System for Non-Smartphone, while working on an application for the 14th Round of Grand Challenges Exploration under the topic, “Enable Universal Acceptance of Mobile Payment, by the Bill and Melinda Gates Foundation.
After evaluation, the application was successful and phase one (1) was funded by the Foundation, through Equity Group Foundation and later by the University of Nairobi.
Experiments on the innovation, he said began from May 1, 2015 to October 31, 2016.
According to Murangiri, as he prepared the application for the grant in October 2014, he shared the innovation with Safaricom PLc through an email dated October 21, 2014, on condition that the company would treat the same in confidence and in good faith.
He argued that he communicated the confidential information through a proposal which Safaricom received and acknowledged and the information was communicated to Safaricom for the purpose of negotiating an agreement between the parties, for creation of the said innovation.
“As such, the Defendant was not supposed to use it for any other purpose other than the intended, nor disclose it to a third party, without his prior consent and pursuant to the aforesaid, the practice in the Industry is such that, revelation of the Confidential information to the Safaricom carried with it the core duty of loyalty and fidelity, whereupon the it owed him a fiduciary duty not to misuse that confidential information,” he said.
However, in breach thereof, on or about May 10,2017, Safaricom unlawfully made use of the information by launching an innovation; “NFC Mobile Payment System for Non-smart phones, in the guise of “MPesa I Tap” and unlawfully made profits there from and the retention of the profits amounts to unjust enrichment on the part of the company.
“As such the Safaricom is liable to account to him, for all profits received by virtue of the usage of the confidential information, as he has suffered loss and damage due to the unlawful action of company.
Safaricom denied liability by arguing that, Near Field Communication Technology (NFC), is an open source of information in public domain, and cannot be attributed to the Plaintiffs innovation and the technology has been used by among others Card Planet, Buy-more and Beba Pay, which was discontinued on March 15, 2015.
Further, since 2012, the company has explored the NFC a technology through a product known as; “My 1963”, which was implemented as a mode of cashless fare payment card for public transport in Kenya and as soon as Lipa na MPesa was launched, a pilot project thereof was conducted involving; 1,500 employees who used the card to pay for their meals at the Safaricom’s cafeteria.
“That, the Defendant then, rolled out, the MPesa 1 Tap, extending the growth of Mpesa from inception on March 6, 2007 and the MPesa 1 Tap, reduced in number the steps required to make, a Lipa na MPesa from; 8 to 2, adding speed and convenience,” company told the court.
Safaricom argued that the MPesa 1 Tap solution contains a proprietary and innovative authentication process that, has no link whatsoever, to Murangiri or alleged innovation. The company further denied receiving any confidential information from him.
The company also argued that that, the only proper channel for sending proposals to the Defendant is through a platform known as “Zindua Cafe” where registered users submit ideas, applications and prototypes for possible development.
As such, the email he sent constitutes an unsolicited information that could not create an obligation of confidence to the Murangiri.
Yester evening, Kenya’s anti-cyber crime unit of the DCI reported that they have apprehended one Robert Mwaura Mwita, an M Pesa fraudster after an associate operation.
According to the DCI, Mwaura and his web of crime cartels, swindle and defraud unsuspecting Kenyans to send money via Safaricom’s MPesa. Mwaura’s crime-web has an accomplices in the guards that work at the various ATM lobbies in Thinka Town.
Mwaura was arrested together with Radar Security Guards Sternely Nyakundi and Robert Simiyu Masinde. They are are currently at Thika West D/CCIO’s Cells.
DCI records revealed that in September alone, Mwaura swindled Kenyans over Ksh2 million.
Mr. Robert Mwaura Mwita- a suspect linked to various cases of MPESA FRAUD in which members of the public have been defrauded MILLIONS of shillings was arrested yesterday by @DCI_Kenya Detectives after an assiduous operation. The suspect has been working in cahoot with…. pic.twitter.com/ygAyUG49XA
…security guards manning various ATMs whom he had recruited to withdraw money after sending them withdrawal secret codes. Upon withdrawing the money conned from unsuspecting members of the public, the said guards have been taking their agreed upon portion & sending the rest…. pic.twitter.com/WC0ZO2rlzT
..to Mwaura, the prime suspect. @DCI_Kenya Detectives- through intelligence- were able to NAB one of the suspects’ in the act (as shown in the videos)& later the prime suspect. Further investigations showed that the two guards; Stanley Nyakundi & Godfrey Masinde Simiyu…. pic.twitter.com/m2dhwPESx6
…had in the month of September alone, sent over Ksh. 2.2 Million to the prime suspect(Robert Mwaura Mwita). The suspects are in lawful custody and will be arraigned on Tuesday to answer to appropriate charges.
A quick survey around Kenya or the streets of Nairobi on the origins of Mpesa will have you fooled. Over 80% of us Kenyans believe Mpesa is a national treasure that encapsulates the innovative potential of the Kenyan people. But, the reality is far from this. Since 2008, we have been deceived on the brand of a foreign corporate colonial in bed with a corrupt Kenyan elite. Mpesa is an ongoing Heist and is not Kenyan invention by any measure.
Today, it is no coincidence that Safaricom and Mpesa run and control almost all aspects of our lives. Our mobile phones, bank services, taxi service, government payment services and even Nairobi’s Big Brother 24/7 security cameras. Behind the big green brand that is now synonymous with our country, is a carefully weaved scheme to rob unsuspecting Kenyans. Safaricom and Mpesa are golden egg laying geese for Kenya’s rooted political elite. A money minting machine.
To understand how it all comes together, it is important to connect the dots and dig deep. This is what we did and the revelations are shocking to say the least. What you are about to read is an 8 part investigative report on the roots of Mpesa, Safaricom, CBA Bank and the daylight robbery that is going on in Kenya.
The True Origins of Mpesa
“Those who do not learn history are doomed to repeat it.” George Santayana
The history of Mpesa dates begins at Vodafone UK’s strategic office in 2003 (source) . Vodafone was experimenting with new products for its emerging business unit. The basic idea was to partner with the UK government’s DFID Financial Deepening Challenge Fund (FDCF) to churn out innovative ideas in line with millennium development goals. After a successful proposal, workshops were organized in Nairobi and Dar Es Salaam. On 11 October, 2005, a pilot partnership followed between the Safaricom, Faulu Kenya, a microfinance institution (MFI), and Commercial Bank of Africa.
A team led by Nick Hughes and Susan Lonie was put together to drive the Kenyan initiative. Originally, M-pesa was conceived to streamline Microfinance Institution (MFI) manual based operation. However, person to person money transfer turned out to be the killer app, shelving the original use cases.
A team led by Nick Hughes and Susan Lonie was put together to drive the Kenyan initiative. Originally, M-pesa was conceived to streamline Microfinance Institution (MFI) manual based operation. However, person to person money transfer turned out to be the killer app, shelving the original use cases.
At the time, Safaricom was heavily linked to the Moi political class of the 90s. Ex-President Moi, Biwott and unknown associates owned of 12.5% of Safaricom via a veiled ownership through Mobitelea. Safaricom was perfect for this project
Once Mpesa exhibited early signs of success, Safaricom and Vodafone executives green lighted the project.
Once Mpesa exhibited early signs of success, Safaricom and Vodafone executives green lighted the project.
Sagentia, a technology consultancy firm based out of Cambridge was contracted to build out everything. Not only did the firm write the software for Mpesa, it also designed the business processes, and provided operational and technical support during the pilot and after launch (source). This is the true origin of Mpesa, the rest is history.
President Uhuru Kenyatta presents Safaricom CEO Bob Collymore (left) with an award
Why Safaricom is Kenya’s Untouchable
This is the second issue of our eight parts investigative series on Safaricom. On its May issue, edition, the Nairobi Law monthly ran with the title ‘Why Safaricom is Kenya’s Untouchable’. No truer words have been spoken on Kenya’s ongoing mass brainwash by a foreign company and closely tied group of Kenyan elite. Safaricom has since sued writers of NLM for defamation. Nation Media Group have also had their adverts contracts with Safaricom terminated when they went ahead to highlight the KPMG audit report that unearthed multi million heist within the teleco.
Safaricom is today the highest tax payer, makes $380 million dollars in profit and employs 5000 Kenyans. Mpesa is a cash cow for Kenya’s political architects. The mobile money unit rakes in 30% of the company’s revenue, 41 billion in 2016, a figure that has gone up consistently over 9 years.
But, behind the veils of Safaricom’s shareholder structure, lies powerful political and corporate vested interest. Their intention is to perpetuate the dance and charade, while siphoning off profits for their fat pockets. Watu wamekuwa wajanjez!
Kenya’s Corruption 2.0 is nothing like the yester years of the Moi Era. Today, corruption is all about well positioned publicly listed companies to milk Kenyans of every coin.
Half of every transaction fee on your Mpesa transactions goes abroad to Vodafone PLC UK. 5% of airtime commissions via Mpesa also go to Vodafone as part of a license agreement. 40% of all profits made by Safaricom go to Vodafone UK Plc as shareholder of 40% of Safaricom’s shares. We, the public only get to own 25%, while the Government of Kenya holds 35% via Treasury.
2 weeks ago, Safaricom announced a special dividend, worth 28 billion. Close to half will be repatriated to the UK’s British Vodafone. The timing of this ‘special dividend’ is suspect, with Kenya’s upcoming elections.
Over and top of profits, there are royalties owed to Vodafone. Vodafone collects annual fees for the contractual licensed use of Mpesa. Vodafone Sales and Services Ltd (VSSL) owns the intellectual property to Mpesa.
“As the inventor of the globally acclaimed mobile money payments service, Vodafone is entitled to licence fees from Safaricom, calculated as a fraction of M-Pesa’s annual turnover. Vodafone Sales and Services Ltd (VSSL) owns proprietary rights to the M-Pesa platform and earns service fees accrued from the use of the mobile money transfer solution.” Business Daily
The terms of the contract stipulate quarterly payments as royalties annually amounting to between 11% – 25% of all Mpesa revenues. So now Kenya and all the services in Kenya that rely on Mpesa tied to a perpetual license owned by Vodafone. The country’s crucial infrastructure – SACCOs, Micro finance institution, Banking, Utility payments, Taxi service, Lipa na Mpesa and the KRA are tied to a licensed product.
This contract is a sham, just like the much-hyped Homecoming of Mpesa Servers from Germany back to Kenya. This was another masquerade to the country into believing there was a fair exchange. The plot was to shift the servers to a new G2 Platform as a guise for siphoning money via the Chinese, and restructure Mpesa intellectual property under new terms. Documents show Agreements were made by Safaricom and G2 Platform supplier under the VPC (Vodafone Procurement Company) 3rd party, a Chinese company Huawei was roped in to facilitate syphoning 30 billion into shell accounts in Luxembourg. (Source: Nairobi Monthly Magazine June edition.)
Needless to say, the timing of these events just before elections is suspect.
Friends in High Places
Not many people are aware of the strong link between Safaricom, Mpesa and State House. It’s a circle of regulators and Kenya’s top elites designed to shield the cash cow from interference. The cow must be milked!
Together, they pull strings to entrench the green brand that has now become culture. A conspiracy at high government levels took all the powers of the Communications Authority. Virtually, every regulator has been secured in Safaricom’s back pocket – the Competitions Authority of Kenya, the Central Bank of Kenya and the ICT Ministry.
Effectively, no institution in Kenya has the teeth or commitment to rope in Safaricom’s excessive sway in Kenya.
The roots of Safaricom are deep rooted in the political figures of the 90s. Ex-President Moi, Nicholas Biwott and unknown associates were linked to owning 12.5% of Safaricom via the infamous Mobitelea. “Its [Mobitelea] owners include politicians from the former government who may have used their influence to facilitate Vodafone’s original $20m investment in Safaricom in 2000. At that stage, Kenya’s regime had become a byword for corruption, with politicians amassing vast wealth.”
Today, the mantle has been passed on to their ilk. The children continue to eat and the dance is kept on.
Like, Ex-Safaricom executive Waita, a learned lawyer who rose through the ranks of Safaricom. He is now firmly set at State House as Deputy State House Chief of staff and head of Public Service. This broad mandate puts him in charge of the President’s Delivery Unit, Office of Budget Management, Performance Contracting and Oversight Office and State Corporations Oversight Office.
President Kenyatta, Nzioka Waita and Bob Collymore promoting an Mpesa product.
Until recently, Mshwari, a mobile lending facility, was the only product allowed on Safaricom’s Mpesa Menu. Commercial Bank of Africa accounts went up from 34,884 in 2011 to 10 million accounts. M-shwari single-handedly propelled the bank from a mid-tier bank in 2013, to a Tier 1 bank all through billions of mobile loan sharking via Mpesa. Yesterday, CBA expanded into Uganda to offer MoKash, a Ugandan version of Mshwari. CBA has the same product in Tanzania with Vodafone.
Now, what most people do not know is that Commercial Bank of Africa is partly owned by the Kenyatta family and close associates. It has reaped enormous benefits from the success of Mpesa and Safaricom. President Kenyatta’s former lawyer Desterio Oyatsi is at the helm of the board as chairman. The president’s younger brother, Muhoho is the Deputy Chairman of Commercial Bank of Africa.
With all these powerful people with ties to Safaricom, no wonder it is untouchable.
Back in London, Vodafone executives are happy cheer on the show.
Kenya Insights has embarked on an in-depth investigation into the underworld operations of Kenya’s biggest telecom, Safaricom, in the first episode of the eight series of investigative pieces, we look into Bitpesa. BitPesa, a promising company, founded in 2013 was first to market using a groundbreaking global payments transfer technology, the Bitcoin Blockchain. Bitcoin blockchain technology, is completely open source, threatens Safaricom’s cross-border money transfer partnerships. A Citi Bank report came out last month citing this technology as highly disruptive in African cross-border payments. Again, Safaricom took to its tried and tested dirty tricks to move fast and shut down the service before it gained traction.
BitPesa’s business model allows customers (businesses and individuals) from both abroad and in Kenya, to send and receive money internationally instantly from your mobile phone. The company chose to use Bitcoin blockchain. Customers based overseas and in Kenya would send bitcoin to Bitpesa and Bitpesa would pay out Mpesa. Or Customers would send Mpesa to Bitpesa, and they received Bitcoin.
A brilliant idea! Joe Mucheru, a renowned successful tech entrepreneur and current ICT Cabinet Secretary was the first investors in the company board. The man has seen it all. From his vast experience building Wananchi, a million dollar Internet Service Provider, and later as a top boss at Google. He immediately saw the value in leveraging an emerging technology to capture the $1.2 billion remittance market now dominated by foreign companies. He put in 40 million KES, 50% of BitPesa’s 70,000,000 seed capital.
All was going well.
Lipisha Consortium Limited, a payment gateway service firm, was contracted by BitPesa to automate the in and outs of Mpesa. For this purpose, it was necessary to sign up for Safaricom’s PayBill API service. The lack of proper APIs in Kenya highlighted earlier, means running a payment gateway is a tightly controlled affair for a privileged few. For example, few companies get all the contracts and are wholly dependent on Safaricom for revenue. This is what Safaricom to have a tight grasp of who, how and when technology companies can access the platform. Lipisha is one of these few privileged companies.
ICT Principal Secretary Sammy Itemere, CS Joe Mucheru with Safaricom chief executive Bob Collymore
Over one and half years, the company began getting outstanding traction. BitPesa went on to raise another $1.2 million to expand its operations in Tanzania, Uganda, Ghana and Nigeria. It immediately got attention from numerous publications on. A Citi Bank report hailed BitPesa for using blockchain technology, for solving Kenya’s poor cross-border payments infrastructure problem. According to sources, by December 2015, the company was moving as much as $400,000 in volumes monthly.
Safaricom could not help but notice BitPesa’s high volumes moving in and out. From its internal servers, Safaricom could see BitPesa’s transactions on customers’ Mpesa accounts. Volumes were going up, and the number of customers was growing.
Safaricom had good reason to worry. The company’s partnerships with foreign money transfer operators earn them a tonne of fees and entrenches Mpesa the brand. Xoom, PayPal, Skrill, Western Union and Worldremit currently have arranged partnerships. So, it was only a matter of time before Safaricom swooped in once more as they have done in the past.
Using its muscle, Safaricom demanded an urgent meeting with SpotCash, a partner company that relies 100% on business from Mpesa. SpotCash had signed up BitPesa Ltd. on its PayBill services via Lipisha Consortium Ltd. The company called insubordinate employees at Spot Cash’s service desk and immediately threatened to cut off ongoing services to the enterprise if the matter was not handled promptly. Sources reveal the tone was harsh and threatening.
Spot cash could do little but oblige. The company immediately shut off the service, triggering what would wind up in High court as a lawsuit for improper termination of services. Safaricom’s sway and monopoly had reared its ugly head again.
Is Bitcoin a Threat to Safaricom’s Mpesa Cash Cow?
For Safaricom, shutting down BitPesa was an attack on a potential threat, and had little to do with any existing law. Asking to see a license from CBK, of which none existed was conniving. BitPesa had not broken any Kenyan law and had taken all prudential measures to align itself with the law.
As a young potentially disruptive start-up company grows up, it begins to get noticed by established companies. This is always a great milestone in any young company’s life. Should the established companies partner with the start-up? Should they copy it? Should they close their eyes and wait to see if the start-up withers? Or, should they try and squash it?
Safaricom’s argument in court, against Bitpesa, was the same argument made by Kenyan Banks to stop Mpesa when it was launched in 2006. Back then, Kenyan Banks argued Safaricom was operating as a bank without appropriate licenses. They called for Mpesa to be banned from operating.
“Banks were publicly grumbling for some time that the playing field was not level for them and that Safaricom was taking on banking business without the appropriate license.”
At the time, Mpesa was unregulated. There was also no regulatory precedence to look up to. The Central Bank of Kenya gave a nod to proceed while monitoring.
Today, the same Banks that argued against it, now depend on it for their operations.
Fast forward to 2016 and the tables have turned. Safaricom is like the Kenyan Banks of yesteryears and now wants to shut down another budding technology, Bitcoin Blockchain.
“Safaricom claimed that Bitpesa had failed to obtain authorization for bitcoin transfers from Kenya’s central bank. Bitcoins are not regulated in Kenya, but Safaricom insists that it produces a licence to that effect.”
Bitcoin drastically lowers the cost of sending money anywhere in the world for free. There are no hidden or varying charges on Bitcoin like Mpesa. There is no license fee required to use the Bitcoin Blockchain like with Mpesa. Any company, big or small can tap into its open technology. Because it is highly disruptive, it potentially eats up what would be Mpesa’s market. Vodafone executives and Safaricom recognised this and came down hard on BitPesa.
In fact, this is not the first time Safaricom has clamped down on a Bitcoin Blockchain company.
Kipochi, another Bitcoin Blockchain company, set up in Kenya in February of 2013. Their plan was to enable interoperable payments between vendors using blockchain. Headed by CEO Pelle Braendgaard, the company set out on developing a prototype, Kipochi Pay.
Kipochi first integrated with Mpesa for testing out the product among a limited set of user, in-house staff. The prototype worked well enough to show the Central Bank of Kenya and local Telecommunication companies what was possible with the technology. It solved the interoperability problem that plagued Kenyan Banks and Mobile money operators. It did not matter that you were on Airtel, Orange, Mpesa or a bank. You could send money for the same price to anyone.
Just like Bitpesa, the company had to partner with a local Mpesa payment gateway. Kopo Kopo was one of the few payments gateways that had permission from Safaricom. Again, like BitPesa, Kipochi got massive coverage from the global press.
Elizabeth Rossiello, BitPesa CEO
The events that followed were all too familiar. Within a week or two, Kipochi’s connection with M-Pesa through Kopo Kopo was shut down abruptly without notice. It took Pelle more than a week to find out that Safaricom had forced Kopo Kopo to shut them down. Sources later revealed that the order to choke them off came from Vodafone in London. Vodafone Executives were up in arms over the attention the company was getting.
Speaking to Pelle and Kipochi, they revealed they had informal meetings with the Central Bank of Kenya, who called them in to find out who they were, what they were up to and what the hell Bitcoin was. Officials at the CBK seemed knowledgeable and gave them an informal green light to continue as long as they partnered with existing financial institutions or Telcos.
Despite Central Bank regulators being wide open to new money transfer and online payments technology, Safaricom would hear none of it. They stifled the project by essentially cutting off the channel access to customers. Kipochi’s USSD Bitcoin wallet required access to servers in racks at local telcos. The approval process took months, as Safaricom dragged out the affair.
In a well-documented documentary film titled ‘Mpesa has no Competition’ on Bitcoin and Mpesa’s clash in Kenya, Pelle cited Safaricom pressured regulators.
Kipochi was eventually forced to close shop after operating in Kenya for more than a year. In his last interview with a local newspaper detailing Safaricom and Mpesa’s dominance, Pelle said “digital currencies can help drive financial inclusion and inter-link mobile money platforms for easy access anywhere around the world. Bitcoin can solve interoperability between mobile money providers both within Kenya and throughout the world.”
As for Petition 502 of 2015, BitPesa and Lipisha Consortium Ltd. lost the case. On 14th December At Milimani Law Courts, Justice Joseph Onguto ruled in favour of Safaricom, saying
“The Commercial Agreement between Lipisha Consortium and Safaricom reveals that Safaricom could suspend, not terminate the services it offers to the plaintiff, even without notice and for any valid reason.”
In the weeks that followed, the Central Bank of Kenya issued a public notice on Bitcoins in Kenya. The CBK clarified bitcoin and virtual currencies in Kenya were not illegal, and Kenyans were free to choose to buy, sell or hold Bitcoin. But the damage had been done. It was too late.
