The Capital Markets Authority (CMA) in Kenya has given the green light to Safaricom for its new money market product called Ziidi. This offering, developed in collaboration with Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited, meets the demand for convenient digital investment options in Kenya.
In the past, Safaricom introduced its first money market fund (MMF) called Mali in partnership with Genghis Capital, an investment bank in Kenya. Mali’s asset base grew to KES 3 billion ($23 million) by November 2024.
The CMA stated that the Zidi Money Market Fund aims to provide accessible and diversified investment opportunities as part of the government’s broader financial inclusion strategy.
Ziidi is set to be launched soon and will target Kenya’s growing retail investment market, driven by increased smartphone usage and digital literacy. With over 35 million active smartphones in Kenya compared to 30 million feature phones, Ziidi will compete with banks, insurers, and fintech companies by directing money market deposits into secure investments like government bonds and T-bills.
Money market funds like Ziidi offer a low-risk alternative for savers seeking better returns than traditional bank rates. Leveraging Safaricom’s extensive network, Ziidi aims to reach unbanked and underbanked users, expanding its financial services and diversifying revenue streams beyond telecommunications.
Safaricom’s primary revenue driver, M-PESA, earned KES 77.22 billion ($596 million) in the first half of 2024 and has played a crucial role in promoting financial inclusion in Kenya.
Ziidi MMF is the latest addition to Safaricom’s product lineup integrated with M-PESA to support the growth of its service revenue, offsetting challenges in its voice, data, and SMS businesses.
While specific details about interest rates and taxes for Ziidi have not been disclosed, Safaricom’s Mali product allows investments starting from KES 100 ($0.77), with daily limits and top-up options. Withdrawals from Ziidi to M-PESA wallets are instant, with applicable fees including a fund manager fee, trustee fee, custodian fee, and withholding tax on interest earned.