Safaricom’s new money market fund (MMF) has pooled Sh2.85 billion since debuting the market in December last year, overshadowing the initial fund that was marred by partnership wrangles.
The telco announced Tuesday that it has now officially launched the new fund, dubbed Ziidi, after piloting it since December.
The move opens up the product to millions of its M-Pesa customers, who can invest as little as Sh100 and earn daily interest. Ziidi’s Sh2.85 billion assets under management are linked to more than 450,000 customers who have joined.
A money market fund is a type of mutual fund that invests in low-risk short-term debt instruments like treasury bills and interest-earning accounts.
The move to officially unveil Ziidi, which is a partnership between Safaricom and two fund managers—Standard Investment Bank (SIB) and ALA Capital Limited—, overshadows Mali, the initial fund that the telco had introduced to the market in 2019.
Mali was a partnership between Safaricom and Genghis Capital. Safaricom and Genghis began piloting Mali as a unit trust in 2019, as they awaited a fund manager licence.
The official launch of Ziidi to all M-Pesa customers comes at a time when Mali has yet to transition from the pilot phase, leaving it with an uncertain future. The telco’s press release did not make any reference to it. Mali is currently operating as a closed fund, meaning that it is not open to new investors.
“As we launch Ziidi MMF, we are making an invitation to every Kenyan, irrespective of their financial standing, to take the first step towards wealth creation,” said Peter Ndegwa, chief executive of Safaricom.
Ziidi offers customers visibility of the daily interest earned. The daily maximum investment limit is M-Pesa’s daily limit of Sh500,000, with each transaction capped at Sh250,000.
The product allows customers to make free deposits into Ziidi MMF accounts and withdrawals into their M-Pesa wallets, offering the same flexibility as is the case with moving money between M-Pesa and M-shwari accounts.
“By combining our institutional synergies with Safaricom, we hope to provide an attractive investment portfolio, which will, in turn, enhance financial inclusion among low- and mid-income earners in line with the government’s bottom-up economic transformation agenda,” said James Wangunyu, SIB’s founder and managing director.