Kenya’s Capital Markets Authority (CMA) has approved Safaricom’s second money market product, Ziidi, marking another step in the telecom giant’s diversification into digital financial services. Offered in partnership with Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited, Ziidi aims to provide accessible investment options for Kenya’s growing retail investment market.
Ziidi: A Digital Solution for Retail Investors
Ziidi targets Kenya’s expanding population of digitally literate, smartphone-equipped users, leveraging Safaricom’s extensive M-PESA network. With over 35 million active smartphones compared to 30 million feature phones in Kenya, the product addresses rising demand for accessible, low-risk investment opportunities.
Key Features and Benefits
- Low-Risk Investments: Ziidi channels deposits into government bonds and Treasury bills, offering a secure option for savers dissatisfied with low bank rates.
- Accessibility: Integrated with M-PESA, the fund will cater to unbanked and underbanked users, continuing Safaricom’s push for financial inclusion.
- Potential Returns: While fees and interest rates are yet to be disclosed, Safaricom’s earlier money market fund, Mali, offered competitive returns.
- Flexibility: Withdrawals are instant to M-PESA wallets, providing liquidity for retail investors.
Competition and Context
Ziidi will compete with traditional banks, insurers, and fintech platforms in Kenya’s burgeoning money market fund space. Its launch follows the success of Mali, Safaricom’s first money market fund, which grew its asset base to KES 3 billion ($23 million) by November 2024.
Safaricom’s Diversification Strategy
As Safaricom seeks to offset declining revenues from its voice, SMS, and data services, its financial services arm continues to grow. In the first half of 2024, M-PESA generated KES 77.22 billion ($596 million) in revenue, cementing its role as the company’s top service revenue driver. Ziidi expands M-PESA’s offerings, further diversifying Safaricom’s revenue streams while driving financial inclusion in line with the Kenyan government’s strategy.
Market Outlook and Impact
Kenya’s retail investment market, fueled by smartphone adoption and digital literacy, presents significant growth potential. With instant access, low minimum investments, and Safaricom’s extensive reach, Ziidi is poised to attract a broad spectrum of investors, including those new to formal financial systems.
Unveiling Next Week
Safaricom is set to unveil Ziidi next week, offering users a convenient platform to save and grow their wealth. As Kenya’s financial inclusion landscape evolves, products like Ziidi are critical to empowering individuals and fostering economic growth.