Safaricom, Kenya’s biggest mobile network provider, has announced a new savings service on its M-Pesa platform for its customers as investors welcomed the development.
The new product dubbed Mali (Kiswahili name for ‘wealth’) still under pilot aims to allow M-Pesa users to invest as low as Kshs 100 and a maximum of Kshs 70,000 which will give a return of 10% interest annually.
A statement from Safaricom on Friday, said they keep exploring different innovations from time to time and based on their performance and relevance to their customers, ‘We evaluate which ones to launch’.
“Mali is one such innovation that is currently in the early testing phase and still subject to ongoing engagement with the relevant regulations for approval.”
“It is therefore premature to comment on our future plans around the service and whether or when it will be available to all or customers.”
Cytonn Investments Chief Executive Edwin Dande in a comment on the development, said, “All money market funds must digitize or perish, it’s just that simple.”
“The days of filling 6-page forms to join a money market fund are gone! Days of waiting 3 days for withdrawal are gone, it must be instant withdrawal. Days of competing with who is connected are gone, it’s now: 1. Technology, 2. Risk management and 3. Ability to earn above-average returns. I am loving it! He said.
Kevin Otieno, Senior Project Manager Stanbic Bank Kenya said, “This is a novel investment vehicle, which should leverage on the lessons learnt from M-Akiba, so as to attain immense success.”
Paul Mutua, Senior Auditor at EY said, “Great. Fund managers will have to find ways to beat this Sustainable Competitive Advantage.”
To use the platform, users will have to register for Mali, by dialing *230# and agree to the terms and conditions. One will be required to be a registered M-Pesa user for over three months.
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Other platforms that the telco allows users to save include the Mshwari Lock Savings Account in partnership with NCBA where users earn an interest of 7.35% per annum when the amounts mature.
Early this year, Safaricom in partnership with Kenya Commercial Bank and CBA Bank introduced a payment interface called Fuliza on M-pesa which allows customers pre-authorisation of transactions for payment to be made later.
The development is part of the telco’s repositioning of its brand promise to its customers.
Micheal Joseph during the 19th celebrations, he said they would review some of the products and services to inculcate a savings culture. For instance, the telco chief executive said the M-shwari product was to promote a savings culture, unfortunately, it had not fulfilled that because of the 7.5% fee for each loan taken.
“We wanted to create a savings culture, not a borrowing culture where you could borrow multiple your savings,” he said adding that, “It became extremely successful except people borrowed more than they saved.”