Business News Highlights

Insurance brokers forced to close shop as sector suffers heavy losses

Many insurance brokers have opted to close shop weighed down by piling debts, Chairman of the Association of Insurance Brokers of Kenya (AIBK) Nelson Omolo has said. Since last year, the brokers have been grappling with tight liquidity that has threatened their business following the introduction of new cash rules, the Association said in a statement.

Mr Omolo attributed the crisis to the advent of risk-based supervision, which he said places responsibility on underwriters and brokers to collect premiums immediately. The same rules do not apply to insurance agents. The latest industry report shows licensed insurance brokers in the country fell by nearly a third to 139 last year from 198 in 2014 as the rules took a toll.

Eastleigh Mall owners lock horns with KRA in Sh386 million tax battle

Eastleigh Mall owners have accused the Kenya Revenue Authority (KRA) of trying to swindle them, terming a Sh386 million tax demand by the regulator as malicious, claiming that they settled all outstanding dues between 2009 and 2014. The shopping mall’s owners say in court filings that the KRA only demanded Sh1.2 million from them after auditing their books on several occasions between 2010 and 2014, which they settled fully.

The KRA and the Assets Recovery Authority (ARA) have obtained a court order barring Eastleigh Mall owners from selling or transferring its assets until an application to take control of the building to recover unpaid revenue has been determined.  The mall’s owners now claim that they do not own the building that hosts the complex hence the two State agencies cannot be allowed to take over the premises to collect rental income to recover the Sh386 million claim.

US-based money transfer firm extends M-Pesa services to the UK

East Africans living in the UK can now use a smartphone app known as ‘Wave’ to send money directly to Safaricom’s M-Pesa wallets, as well as to Uganda and Ethiopia through MTN mobile money.  This comes just as Wave, a New York-based money transfer firm, has expanded its M-Pesa-linked diaspora remittance services to the United Kingdom. Users can also send to Tanzania’s M-Pesa.

Wave, which was launched in May 2014, was previously only available in the US and Canada. Remittance inflows from Europe, mostly the UK, accounted for nearly a third of the $559 million (Sh55.9 billion) Kenyans sent back home in the five months to May this year. Wave Co-Founder and Chief Executive, Drew Durbin said the money transfer firm is banking on the fact that it does not charge any commission to send cash to win market share.

Kenya saves Sh50 billion in fuel import bills as global prices plummet

Kenya has saved an estimated Sh50 billion in petroleum import bills during the first half of the year despite the steep rise in consumption due in part to low global petroleum prices. Kenya imported Sh92.7 billion worth of fuel and lubricants in the year to June, down from Sh140 billion in the same period last year – cutting its oil import bill by Sh47.3 billion, the Energy Regulatory Commission (ERC)has confirmed.The ERC said the reduction in the import bill was largely due to the plummeting of global oil prices that began in the second half of last year and has persisted to date.

Kenya now imports all its refined petroleum products after it closed the Kenya Petroleum Refineries Limited in September 2013. Motorists paid an average of Sh85 at the pump for a litre of petrol in Nairobi in the year to June, down from Sh91 in a similar period last year, saving them an average of Sh6 per litre. Diesel pump prices stood at an average of Sh70 a litre in the capital city, down from Sh79 – helping motorists to free up Sh9 for every litre consumed.

Pewin Cabs launches new app as taxi service sets sights on retail customers

Taxi services provider Pewin Cabs has launched a taxi hailing application dubbed the ‘Dandia’ App in a bid to expand their product offering to the retail market.

The Dandia app, which targets the retail market, is an upgrade of the existing corporate app, which has been in the market for the last 3 years.  To boost customer acquisition, especially during the weekends, the company is offering a 20 per cent discount to first-time users of the app.
The Dandia app which compliments the existing Pewin app, offers customers fixed pricing, the opportunity to choose the type of vehicle to use depending on the number of customers and a dedicated 24-hour call centre in case of any queries. Under the Pewin Management, the firm’s 700 existing drivers are not only on a secure payroll, but also receive bonuses based on performance. Drivers operating under the Dandia app are paid on a weekly basis, with Pewin taking only 10 per cent commission on revenue. Additionally, they are offered free parking within the central business district to ease operations.

 

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