Vodafone has announced that it would sell M-Pesa Holding Company Limited (MPHCL), the company that manages all M-Pesa deposits, to Safaricom for $1.
Per its financial statement, the transaction began on April 17, 2023, and should be completed by July 2023.
M-Pesa Holdings is different from the M-Pesa service Safaricom offers. The former is the trustee that holds all deposits of the latter and invests them for the benefit of the customers.
While Vodafone is yet to reveal why it’s selling the trust to Safaricom, many believe that the move will boost Safaricom’s activities.
With three consecutive quarters of financial decline—mostly led by the cost of its expansion into Ethiopia—Safaricom could use a cash flow-generating asset like MPHCL. The holding company, per Vodafone, presently has €1.2 billion ($1.3 billion) in customer funds which Safaricom could invest in short-term securities.
Lawsuit
The sale also transfers liabilities of MPHCL to Safaricom, which includes a $2.4 billion lawsuit filed by three Kenyans.
In it, the plaintiffs claim that MPHCL violates Kenya’s trust laws by using customer deposits to give loans through its Fuliza service.
