Kenya’s Capital Markets Authority (CMA) has authorized Safaricom’s second cash market product, Ziidi. The product, which will likely be provided in partnership with Normal Funding Financial institution, ALA Capital Restricted, and Sanlam Investments East Africa Restricted, instantly solutions Kenya’s demand for accessible digital investments.
In 2019, Safaricom launched its first cash market fund (MMF), Mali with Genghis Capital, a Kenyan funding financial institution. Mali’s asset base grew to KES 3 billion ($23 million) in November 2024.
“Zidi Cash Market Fund is anticipated to empower unit holders by providing accessible and diversified funding choices as a part of the broader Nationwide Authorities’s monetary inclusion technique,” CMA stated in a press release on Wednesday.
When unveiled subsequent week, Safaricom’s Ziidi will goal Kenya’s increasing retail funding market pushed by smartphone adoption and digital literacy. Kenya has over 35 million lively smartphones in comparison with 30 million function telephones.
Ziidi will compete with banks, insurers, and fintechs by channeling cash market deposits into low-risk investments like authorities bonds and T-bills.
Cash market funds supply a low-risk possibility for savers dissatisfied with low financial institution charges. Ziidi will use Safaricom’s community to focus on unbanked and underbanked customers, increasing its monetary providers and diversifying income past telecoms.
Safaricom’s cell cash product, M-PESA, is its greatest service income driver, incomes KES 77.22 billion ($596 million) within the first six months of 2024. M-PESA has been key to driving monetary inclusion in Kenya.
Ziidi MMF is the most recent Safaricom product embedded into M-PESA’s choices to help the cell cash product’s rising service income to offset challenges in its voice, knowledge, and SMS enterprise.
Ziidi’s curiosity expenses and different tax obligations haven’t been disclosed. Nonetheless, Safaricom’s Mali product permits investments from KES 100 ($0.77), with a each day cap of KES 300,000 ($2320) and top-ups starting from KES 100 ($0.77) to KES 70,000 ($540).
Withdrawals are prompt to M-PESA wallets. Charges embrace a 2% annual fund supervisor payment, 0.2% trustee payment, 0.15% custodian payment, and a 15% withholding tax on curiosity earned.