Kiosk economy: How small traders fuelled Safaricom's Sh100b profit

More than Sh1.2 trillion flowed through small merchant “Till Numbers” in just six months, a staggering figure that explains how tiny, everyday transactions built a record-breaking profit machine for Safaricom. 

The country’s largest telecommunications company reported a net profit of Sh99.7 billion for the year ending March 2026, a 67.3 per cent increase from the previous year. 

While the company was once defined by airtime sales, its latest results show that the “kiosk economy”—millions of vegetable sellers, bus operators, and small-scale traders—is now the primary engine of its growth.

The shift is evident in the rapid expansion of Safaricom’s merchant base, which reached 3.13 million businesses by March 2026. 

This 71 per cent increase from the previous year was driven largely by the informal sector and “Pochi La Biashara,” a digital wallet for micro-traders that saw its user base surge by more than 80 per cent.

The scale of this digitised “hustle” is immense, with Safaricom now processing nearly 500 million transactions a day worth about Sh100 billion.

For Safaricom, the profit lies in the relentless volume of micro-payments. For every transaction above Sh200, the company collects a fee of 0.5 per cent, capped at Sh150. 

While a single Sh500 payment to a vendor yields a mere Sh2.50 fee, these microscopic charges multiplied by billions of transactions drove M-Pesa revenue to Sh182.7 billion.

This now accounts for nearly 46 per cent of Safaricom’s total service revenue, a structural shift that the telco’s Chief Executive Peter Ndegwa says has placed the merchant at the very centre of the nation’s commerce.

The “Till Number” has evolved beyond a simple payment tool into a powerful credit identity that allows Safaricom to bypass traditional banking hurdles.

By tracking the real-time cash flow of a market stall, the company offers instant, unsecured loans to merchants who would otherwise be deemed unbankable. 

This ecosystem is anchored by products like Fuliza, an overdraft facility that saw disbursements hit Sh1.47 trillion as traders used it to smooth daily stock purchases, and the newer Taasi till loans, which provide Pochi users with capital in less than a minute.

Total lending across the platform reached Sh777.5 billion over the year, serving 9.5 million customers who now rely on their phones rather than bank branches.

Legacy business lines

At Naivasha’s Karagita market, shoe sellers like Beatrice Adhiambo illustrate the model in action. Processing Sh8,000 in daily sales via her digital till, she pays roughly Sh1,200 in monthly fees but gains the ability to borrow up to Sh10,000, she said, instantly through Fuliza when her balance is low. 

This seamless integration of payments and credit is precisely what is driving Safaricom’s bottom line, even as its legacy business lines fade, analysts and Safaricom executives say.

Traditional voice revenue grew by a marginal 1.3 per cent, while messaging revenue plummeted nearly 12 per cent as customers migrated to internet-based apps like WhatsApp.

The record profit arrived despite a Sh21.2 billion net loss from the company’s expansion into Ethiopia, where the merchant ecosystem is still in its infancy. 

For now, the Kenyan profit centre remains dominant, with Safaricom executives led by Ndegwa eyeing the 4.27 million small businesses that still operate primarily in cash as the next growth frontier. 

For Safaricom, every new kiosk that swaps a cash drawer for a digital till represents a fresh stream of fees and a new contributor to a profit machine that shows no signs of slowing down.

During the announcement of results last week, Chief Financial Officer Dilip Pal said M-Pesa remained the key driver of revenue performance in the period, contributing 59.2 per cent of total revenue growth, expanding its revenue mix to 45.6 per cent and growing by 13.4 per cent year-on-year.

“Financial service segment, which includes credit, wealth, and insurance, continues to scale, growing 19.1 per cent, the fastest growth we have seen in the last three years,” he said.

With the telco’s Ethiopian subsidiary starting to grow its feet, the company is likely to expand its revenues significantly, considering the country’s sizable population of almost 140 million people.

Safaricom Ethiopia narrowed its losses in the second half to Sh7.8 billion compared to Sh13.4 billion in the first half. Losses for the year shrank to Sh21.2 billion from Sh36 billion in 2024. 

If the unit manages to entrench M-Pesa in the country’s financial transactions as Kenya has achieved, its impact on small businesses will be huge and vastly profitable.   

Safaricom Ethiopia Chief Executive Wim Vanhelleputte said financial services are the next phase of growth for the business unit.

“In the long term, M-Pesa is going to play a major role in the growth story of Ethiopia, especially because today the revenue contribution of M-Pesa is still very small,” he said.