Kenya’s Capital Markets Authority (CMA) has given the green light to Safaricom’s second money market product, Ziidi. This new offering, developed in partnership with Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited, aims to meet Kenya’s growing demand for accessible digital investments.
Safaricom first entered the money market fund (MMF) space in 2019 with the launch of Mali, in collaboration with Genghis Capital, a Kenyan investment bank. By November 2024, Mali’s asset base had grown to KES 3 billion ($23 million).
In a statement released on Wednesday, the CMA said,
Zidi 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.
Set to be unveiled next week, Ziidi will target Kenya’s expanding retail investment market, which is being driven by increased smartphone adoption and digital literacy. Kenya currently has over 35 million active smartphones compared to 30 million feature phones.
Ziidi will compete with banks, insurers, and fintech companies by channeling money market deposits into low-risk investments such as government bonds and T-bills. Money market funds provide a low-risk option for savers who are dissatisfied with low bank interest rates. Ziidi will leverage Safaricom’s extensive network to reach unbanked and underbanked users, thereby expanding its financial services and diversifying its revenue streams beyond telecommunications.
Safaricom’s mobile money product, M-PESA, is its largest service revenue driver, generating KES 77.22 billion ($596 million) in the first six months of 2024. M-PESA has been instrumental in advancing financial inclusion in Kenya. The Ziidi MMF is the latest Safaricom product to be integrated into M-PESA’s offerings, supporting the mobile money product’s growing service revenue and helping to offset challenges in its voice, data, and SMS business segments.
While the interest rates and other tax obligations for Ziidi have not yet been disclosed, Safaricom’s Mali product allows investments starting from KES 100 ($0.77), with a daily cap of KES 300,000 ($2,320) and top-ups ranging from KES 100 ($0.77) to KES 70,000 ($540). Withdrawals are instant to M-PESA wallets, and the fees include a 2% annual fund manager fee, a 0.2% trustee fee, a 0.15% custodian fee, and a 15% withholding tax on interest earned.
