Safaricom’s “Bonga For Good” initiative was made possible by the value of unclaimed Safaricom Bonga Points at a value of Sh3.94 billion through the year to March 2020, a rise from the previous year’s value of Sh3.85 billion.
This year, the giant telco increased the options for customers redeeming Bonga Points including resources such as shopping, paying for air tickets, fueling cars, repaying education loans as well as donating to the needy during the Covid-19 pandemic period.
In the two months to June 2020, about a billion bonga points valued at Sh301 million were redeemed in the “Bonga for Good” initiative. The initiative was launched in April , allowing users to convert one point for 30 cents.
This helped customers purchase goods and services and even donate points to the most vulnerable to purchase essential items following the financial crisis occasioned by the Coronavirus pandemic.
Bonga points are accounted for as deferred income or a liability in Safaricom’s books hence the Telco’s push to have more subscribers redeem and use points to convert them into revenue.
“Management defers revenue for every point accumulated and recognizes the revenue relating to the points earned on redemption,” said Safaricom in the latest annual report.
The same concept applies to how Safaricom recognizes its Airtime Revenue. Until prepaid airtime is sold to and used by a customer, it is held as deferred revenue. The value of unused data bundles and airtime by prepaid customers was Sh 2.5 billion at the end of March, same as the previous year.
Safaricom introduced Bonga Points in 2007, rewarding customers one point for every Sh 10 spent.
Once the points build up, they tie up the company’s revenue until they are redeemed. The case applies to both individual and enterprise business customers.
By the end of March 2020, Safaricom had 35.61 million subscribers with a 17.9 percent net profit growth to 73.66 billion.