Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

FinTech

Strong quarterly growth for Vodacom financial services

Article Image
Vodacom's financial services business is booming, with revenue growing by 24.3% to R619 million (US$41.3 million) in the last quarter of 2020. This is according to the South African-based operator's quarterly trading update for the three months to December 31, 2020.

Group CEO Shameel Joosub said the financial services business remained a very strong performer and growth was supported by a significant increase in demand for its Airtime Advance lending product and a healthy increase in insurance policies.

"Our partnership with Alipay will add new dimensions to our Financial Services' proposition and in particular VodaPay, which will become our single lifestyle super app," Joosub added in a prepared statement.

The financial services division has been growing steadily over the past four years, under the leadership of Mariam Cassim. It has grown from a loss-making entity into one that contributes over R1 billion ($66.8 million) in profit to the group.

Vodacom now has 13.1 million customers using its financial services products, a 24.3% increase compared to the same quarter a year ago.

In South Africa, Vodacom gave R3.1 billion ($207 million) worth of micro-loans for airtime during the quarter, an increase of 27.7% year-on-year (YoY) and grew the number of Airtime Advance customers by 26.5% YoY, to 10.7 million.

The number of insurance policies increased 11.2% YoY to 2 million. Vodacom has evolved from just offering device insurance to add more services such as life insurance, funeral cover and contract cover.

Revenue ticks up

Overall the group saw service revenue increase 3.9% YoY for the quarter, to R19.6 billion ($1.3 billion), driven by strong growth in South Africa and improved growth in the international operations of Tanzania, DRC, Mozambique and Lesotho.

"In South Africa, service revenue grew 5.4%, with both our Consumer and Vodacom Business segments contributing to growth, despite our material data price reductions on 1 April 2020," Joosub said.

However, the international operations' service revenue declined by 1.4%, but M-Pesa's growth supported a notable sequential improvement in the YoY decline of normalized service revenue.

Source: Vodacom Group trading update for the quarter ended December 31, 2020.
Source: Vodacom Group trading update for the quarter ended December 31, 2020.

Revenues from M-Pesa increased 10.1%, to R1.2 billion ($80.1 million) in the quarter, largely the result of a 7.7% increase in customers, with almost 16 million people or just under half of the total international customer base now making use of the mobile money platform.

If you include Safaricom, monthly M-Pesa transactions were $24.2 billion, up 57.8% year-on-year.

The group also invested R3.4 billion ($227 million) in its network during the quarter, as it expanded 4G coverage, speeds and capacity.

In South Africa alone, it invested R2.7 billion ($180.3 million) to support data demand and shifts in customer behavior patterns with a need to work, entertain and educate from home because of the ongoing COVID-19 pandemic.

Related posts:

*Top image is of Vodacom Group CEO Shameel Joosub (Source: Vodacom).

Paula Gilbert, Editor, Connecting Africa

Innovation hub

Story

Hot startup of the month: Kenya's Swifttdial

Kenyan company Swifttdial is helping companies in Kenya and Nigeria set up cloud-based virtual call centers, with plans to expand further into West Africa.

Story

Hot startup of the month: Egyptian telemedicine platform Vezeeta

Vezeeta, an Egyptian telemedicine platform, had a big 2020, raising US$40 million in Series D funding and expanding its healthtech services into Kenya and Nigeria.

More Innovation hub

Industry announcements

More Industry announcements

Flash poll

All polls

Latest video

More videos

Upcoming events

East Africa Com
May 11-12, 2021
Virtual Event
Africa Tech Festival
November 8-12, 2021
Cape Town, South Africa
More Upcoming events

Sponsored video

More videos

AfricaCom perspectives

Story

AfricaCom Interview: Onica Makwakwa on closing the digital gender gap

The Alliance for Affordable Internet's head of Africa, Onica Makwakwa, shares her views on how to narrow the digital gender gap and the challenges keeping women offline on the continent.

Story

AfricaCom Interview: Tunde Fafunwa on how the ACIP is fighting COVID-19

Tunde Fafunwa from the UN Economic Commission for Africa explains how the Africa Communication and Information Platform (ACIP) is helping Africa's battle against COVID-19.

Story

AfricaCom Interview: Temidayo Oniosun on Africa's space and satellite industry

Space in Africa founder, Temidayo Oniosun, shares his views on the challenges and opportunities in the African space and satellite industry.

More AfricaCom perspectives

Partner perspectives

How mobile operators in Africa can address signalling threats and secure the network
By Katia Gonzalez, Head of Fraud and Security at BICS

SD-WAN and satellite how MNOs and telcos can enjoy the best of both worlds
By Ofer Asif, SVP BizDev, marketing and strategy at Spacecom

Africa's mobile operators need better roaming monetization for growth
By Damion Rose, product manager for Mobile Signaling and Roaming Solutions at BICS

All Partner Perspectives

Like us on Facebook

Newsletter Sign Up


Sign Up