Safaricom holds unredeemed Bonga points worth $37m

Business Daily reports the total number of Bonga points accumulated now stands at 10 billion, with the growth, though around 20 per cent still remain unredeemed.

Safaricom has been trying to offset the liability by encouraging customers to redeem their Bonga points with smartphones, air tickets and pay-V subscription.

Other redeemables include mobile phones, tablets, laptops and accessories such as modems and routers, free talk time, data, SMS and MMS bundles.

Encouraging redemption of points

"We encourage redemption of the points so that the programme can achieve its objective and also clear our books of accrued liability," Safaricom said in a statement provided to the Business Daily.

Safaricom awards one Bonga point to its customers for every KSh10 spent on its network, with the money entered as a liability in its accounting books and the revenue relating to the points earned only on redemption.

Accounting deadlines require the company to recognise the points as sales after they have been redeemed, meaning the accrued points remove from Safaricom profits.

Article published courtesy of HumanIPO.