Kenya’s Capital Markets Authority (CMA) has approved Safaricom’s latest Money Market Fund (MMF), Ziidi, marking the telco’s second venture into digital investments.
Offered in partnership with Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited, Ziidi aims to tap into Kenya’s growing retail investment market.
This approval follows the success of Safaricom’s earlier MMF, Mali, which has grown its asset base to KES 3 billion (about $23 million).
According to CMA, Ziidi will offer “accessible and diversified investment options” as part of the government’s broader financial inclusion strategy.
With over 35 million active smartphones in Kenya, Safaricom is leveraging its M-Pesa ecosystem to expand its reach, especially among unbanked and underbanked populations.
How Ziidi MMF Stands Out From Mali MMF
While both products are integrated into M-Pesa, the main difference lies in the fund managers. Ziidi partners with Standard Investment Bank, ALA Capital, and Sanlam, while Mali is managed with Genghis Capital.
These distinctions could influence fund performance, fees, and features. However, Safaricom has not clarified whether Ziidi complements or competes directly with Mali, leaving users to assess based on their preferences.
Also Read: Safaricom Mali, A New Investment Tool Powered by M-Pesa
Both products share key features like low-risk investments in government bonds and treasury bills, which appeal to savers dissatisfied with traditional bank rates.
Withdrawals are instant via M-Pesa, but Safaricom has yet to disclose specifics about Ziidi’s charges or tax obligations.
For context, Mali has a 2% annual fund manager fee and other associated costs, alongside a minimum investment of KES 100 (around $0.77).
The Bigger Picture for Money Market Funds
Money Market Funds pool investments in low-risk assets, offering competitive returns while ensuring liquidity. They are ideal for short-term savings and provide a safer alternative to the stock market.
In Kenya, MMFs have gained traction as individuals seek more flexible and accessible ways to grow their savings.
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Ziidi aligns with Safaricom’s strategy to diversify revenue streams beyond its traditional telecom services. With M-Pesa earning KES 77.22 billion (approximately $596 million) in the first half of 2024, financial services remain central to the company’s growth.
Products like Ziidi are part of a broader push to integrate savings, credit, and wealth management solutions into the M-Pesa ecosystem.
What This Means for Investors
Ziidi’s launch signifies Safaricom’s commitment to expanding digital financial solutions.
By targeting Kenya’s digitally literate population, the company positions itself to dominate a competitive market that includes banks, insurers, and fintechs.
Investors now have more options within M-Pesa to grow their wealth with minimal risk.
As Ziidi prepares to launch, users should weigh its potential benefits against existing options like Mali.
Safaricom’s move also highlights the evolving landscape of financial inclusion in Kenya, driven by technology and innovation.
