Safaricom Gets Regulatory Approval As Kenyan Investors Eye New Money Market Fund

Safaricom is gearing up to launch its second money market fund (MMF), Ziidi, following regulatory approval from Kenya’s Capital Markets Authority (CMA). This move reflects the growing appetite for digital investments in Kenya, a country where financial inclusion has been turbocharged by mobile innovation.

The Ziidi MMF will be launched in collaboration with Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited. According to CMA, “Ziidi Money Market Fund is expected to empower unit holders by offering accessible and diversified investment options as part of the broader National Government’s financial inclusion strategy.”

This new fund builds on the success of Safaricom’s first MMF, Mali, introduced in 2019 with Genghis Capital. By November 2024, Mali’s asset base had grown to KES 3 billion ($23 million), underlining the popularity of mobile-centric investment products.

Targeting Kenya’s Digital Savvy Market

Ziidi aims to capture the expanding retail investment market, spurred by increased smartphone adoption and rising digital literacy in Kenya. With over 35 million active smartphones in use—far outstripping feature phones—digital solutions like Ziidi are well-positioned to cater to Kenya’s tech-savvy population.

The fund is set to channel deposits into low-risk investments such as government bonds and treasury bills. It will compete directly with banks, insurers, and fintech companies, offering an alternative to traditional saving methods for those dissatisfied with low bank rates.

Safaricom’s mobile money platform, M-PESA, which is set to be transformed by a new regulatory approval, plays a central role in its financial services strategy, having generated KES 77.22 billion ($596 million) in revenue during the first half of 2024. With Ziidi embedded into M-PESA, Safaricom is expanding its revenue streams beyond telecom services, tackling challenges in its voice, data, and SMS segments.

What to Expect

Although specific details on Ziidi’s interest rates and fees remain under wraps, its predecessor Mali set a precedent. Mali allows investments starting from as little as KES 100 ($0.77) and offers instant withdrawals to M-PESA wallets. Fund-related charges include a 2% annual fund manager fee, a 0.2% trustee fee, and a 0.15% custodian fee, alongside a 15% withholding tax on interest earned.