Customers of Kenya’s eminent telco Safaricom can now buy shares listed on the Nairobi Securities Exchange using their Bonga Points. This marks the first investment option for redeeming the Bonga Points loyalty reward, which can be used for a multitude of other options in the past.
According to Safaricom, who announced its new partnership with the NSE on Monday, its customers will receive Sh1 ($0.009) for every five loyalty points to be used to invest in stocks.
Introduced in January of 2007, the Bonga Point loyalty scheme gives Safaricom subscribers one Bonga point for every Sh10 spent. This runs for both individual subscribers as well as enterprise business customers.
Previously, the telco’s customers could only use their accumulated Bonga Points for the purchasing of consumer goods and other services, such as mobile phones, accessories, air tickets, shopping, petrol for motor vehicles and to pay for education loans.
“Through this partnership with NSE, we seek to give our customers more value and utility for their Bonga points while creating more avenues for driving economic empowerment,” said Peter Ndegwa, Safaricom’s CEO.
According to Business Daily Africa, the decision to allow customers to use the loyalty points for investing in shares comes as the value of unclaimed Safaricom loyalty rewards has hit an Sh4.2-billion ($38.5-million) all-time high this year, compared to Sh3.9-billion ($35.7-million) the year prior.
The redemption of loyalty points has been crucial for the telco since the points are accounted for as a liability or as deferred income in Safaricom’s books, and are only recognised as revenue once they are utilised by customers.
In this new partnership with the NSE, Safaricom has selected ten trading participants that will allow Bonga Points trading, including NCBA Capital, Faida Investment Bank, AIB-AXYS, ABC Capital, Old Mutual Securities and Kingdom Securities.
Other firms include Suntra Investment Bank, Francis Drummond & Company, Dyer & Blair Investment Bank and Sterling Capital.
Customers who have yet to open accounts at the Central Depository and Settlement Corporation (CDSC) will have to register first before accessing the option to use the points for trading via a short service code or through the Safaricom app.
“The partnership resonates with our resolve to connect capital with opportunities as anchored in the NSE 2020-2024 strategic plan. It further provides an avenue for retail investors to participate in the NSE and is coming on the backdrop of the stock market’s recovery following the COVID-19 pandemic,” said Geoffrey Odundo, CEO of the NSE.