Safaricom, the largest telecommunications company in Kenya, has announced a new plan to settle the debts of customers who delay paying their Okoa Jahazi credit advance by debiting their loyalty points. The move is intended to reduce the value of outstanding Bonga points, which have become a liability to the company.
The Okoa Jahazi service allows Safaricom customers to request a credit advance, which they must repay within five days. A 10% advance fee is charged for each Okoa Jahazi request, and customers receive 90% of the credit advance. With the new plan, Safaricom will automatically debit a customer’s loyalty points to settle the outstanding debt if the customer fails to repay the advance on time.
The Bonga loyalty program, initiated by Safaricom in 2017, permits both prepaid and postpaid subscribers to earn points for every KES 10 spent on the company’s network. These points can be utilized to redeem rewards, such as talk-time, data bundles, messaging bundles, and merchandise at selected retail outlets when using the Lipa na M-Pesa service.
However, the Bonga program has become a liability to Safaricom, with billions of shillings worth of outstanding points that have not been redeemed. In March 2022, the company had accumulated liabilities of KES 4.5 billion, prompting the company to consider putting an expiry date on the program. This plan was later reversed, and the company is now using loyalty points to settle the debts of customers who use the Okoa Jahazi service.
The move is expected to encourage customers to redeem their loyalty points, which will reduce Safaricom’s liabilities. Each point is estimated to be worth 30 cents, and customers can redeem them for a range of rewards. For example, 50 Bonga Points can earn a customer four minutes of talk time, while 600 points can give 3,500 SMSs valid for 30 days.
Aside from settling debts, Safaricom has also imposed a time limit on the usage of data resources purchased through its Bonga loyalty points. Previously, Bonga data bundles had no expiration date, but now they are only valid for seven days.
The move by Safaricom to use loyalty points to settle debts is an innovative approach to addressing the company’s liabilities while encouraging customers to redeem their rewards. It remains to be seen whether the plan will be successful in reducing the company’s liabilities and incentivizing customers to use their loyalty points. Nonetheless, it is a positive step towards addressing the challenges facing Safaricom’s loyalty program and improving the company’s financial position.