Safaricom receives regulatory approval to launch second money market fund, Ziidi

Kenya’s Capital Markets Authority (CMA) has approved Safaricom’s second money market product, Ziidi. The product, which will be offered in partnership with Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited, directly answers Kenya’s demand for accessible digital investments. 

In 2019, Safaricom launched its first money market fund (MMF), Mali with Genghis Capital, a Kenyan investment bank. Mali’s asset base grew to KES 3 billion ($23 million) in November 2024.

“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,” CMA said in a statement on Wednesday.

When unveiled next week, Safaricom’s Ziidi will target Kenya’s expanding retail investment market driven by smartphone adoption and digital literacy. Kenya has over 35 million active smartphones compared to 30 million feature phones. 

Ziidi will compete with banks, insurers, and fintechs by channeling money market deposits into low-risk investments like government bonds and T-bills.

Money market funds offer a low-risk option for savers dissatisfied with low bank rates. Ziidi will use Safaricom’s network to target unbanked and underbanked users, expanding its financial services and diversifying revenue beyond telecoms. 

Safaricom’s mobile money product, M-PESA, is its biggest service revenue driver, earning KES 77.22 billion ($596 million) in the first six months of 2024. M-PESA has been key to driving financial inclusion in Kenya.  

Ziidi MMF is the latest Safaricom product embedded into M-PESA’s offerings to support the mobile money product’s growing service revenue to offset challenges in its voice, data, and SMS business. 

Ziidi’s interest charges and other tax obligations have not been disclosed. However, Safaricom’s Mali product allows investments from KES 100 ($0.77), with a daily cap of KES 300,000 ($2320) and top-ups ranging from KES 100 ($0.77) to KES 70,000 ($540). 

Withdrawals are instant to M-PESA wallets. Fees include a 2% annual fund manager fee, 0.2% trustee fee, 0.15% custodian fee, and a 15% withholding tax on interest earned.