Safaricom will soon be introducing an investment tool dubbed Mali, which will allow MPesa users to invest as little as 100 for daily interest. Mpesa users will be able to register Mali using the USSD code *230#, providing a valid email address and a next of kin contact
As it makes effort to hold a larger section of the financial services market, Safaricom plans to partner with a fund manager who is already licensed by the Capital Markets Authority (CMA) to approve the new investment product.
Subscribers will have a chance to make payments from their M-Pesa to be placed in collective investment schemes in assets such as government securities, fixed bank deposits and stocks. The subscribers will get returns from capital growth or dividends as M-Pesa expands its services from traditionally sending and receiving cash.
Safaricom is awaiting regulatory approval to introduce the product which is set to offer interest rates of 10 percent on capped deposits at 70,000 per saver. This is based on a pilot test that began in December 2019.
We are in the final stages of piloting a unit trust investment product enabling customers to create and retain wealth,” said Michael Joseph, a director at Safaricom who served as the acting CEO until April this year, in an online investor briefing last week.
“The new market based app which will launch shortly will aid in enhancing M-Pesa as an online platform.”
Safaricom did not divulge more details regarding the product but it is expected that the product will generate more revenues from the wealth management service fees.
M-Pesa revenues increased by 12.4 percent to 84.4 billion in the year closing March. This figure accounts for a third of the Telco giant’s revenues. M-Pesa payments are expected to account for half f the company’s revenues in years to come, as the voice and SMS revenues continue to flatten.
With a 10 percent interest rate, the investment return from Mali is nearly double the interest rate that banks pay on savings.