Safaricom Borrows KSh 24 Billion Loan After Half Year Profit Drops

Safaricom borrowed additional short-term bank loans amounting to KSh 24.7 billion over the half-year period that ended in September.

The decision to take the loan was caused by a 6% decline in the company’s half-year profit since the outbreak of COVID-19 pandemic.

In the financial report released recently, the telco recorded a drop in profit for the first time in eight years.

According to the management, this was largely caused by the removal of M-Pesa transaction fees of up to KSh 1,000.

The decision to take more loans as a cash flow management measure has increased the Telco debt burden to KSh 32.7 billion.

However, financial experts said there was no reason for concern for Safaricom to take the loans, adding that the company has the ability to repay the money within one year.

The experts have noted that loans were taken to pay dividends in advance and to further invest in technology, with high chances of making profits in the future.

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