Worth Your Money? Everything You Need To Know About Safaricom’s New Money Market Fund Ziidi
Telco giant Safaricom PLC has officially entered the money market sector through its subsidiary, Ziidi Money Market Fund (Ziidi MMF). This new venture follows the Capital Markets Authority (CMA) granting Ziidi MMF a license to operate as a Collective Investment Scheme (CIS).
Ziidi MMF will be accessible via the MPESA platform, akin to Safaricom’s Unit Trust product, Mali, which is managed by Genghis Capital. The new product is a partnership between Safaricom and key industry players, including Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited.
CMA’s CEO, Mr. Wycliffe Shamiah, emphasized the strategic importance of the initiative, stating that it reflects the regulator’s commitment to fostering innovation while enabling Safaricom to expand its footprint in the financial services sector.
Ziidi MMF Features and Benefits
Low Entry Barrier: With a minimum investment of KES 100, Ziidi MMF is accessible to many users, including those traditionally excluded from formal investment platforms.
Instant Access to Funds: Deposits and withdrawals can be made instantly, ensuring flexibility for users who may need quick access to their money.
Tech-Enabled Convenience: The service is available through both the M-Pesa app and USSD code (*334#), making it accessible even to non-smartphone users.
Regulated and Secure: The fund is licensed by the Capital Markets Authority (CMA) and managed by Genghis Capital, ensuring transparency and security for investors.
Ziidi MMF is a partnership by Safaricom with Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited.
The Ziidi MMF positions Safaricom as a disruptor in Kenya’s financial services space.
Its integration with M-Pesa bridges the gap between digital financial services and traditional investment products, offering an innovative approach to saving and wealth management.
Understanding Money Market Funds
A money market fund (MMF) is a type of mutual fund that invests in cash and low-risk, short-term debt securities.
These funds provide investors with higher returns compared to traditional bank rates, which are often tied to central bank policies. Introduced in the 1970s, MMFs were designed to offer more competitive returns while maintaining low risk.
The Popularity of MMFs in Kenya
Money market funds remain the most sought-after investment vehicles in Kenya. As of June 2024, MMFs accounted for KSh 171.2 billion or 67.4% of all assets under management within Collective Investment Schemes.
Other fund categories, including Fixed Income Funds (KSh 52.1 billion), Equity Funds (KSh 2.6 billion), Balanced Funds (KSh 1.4 billion), and Other Funds (KSh 26.8 billion), collectively made up the remaining 32.6%.
Safaricom’s entry into the MMF space signals its continued diversification beyond telecommunications and highlights its commitment to offering innovative financial solutions tailored to the needs of Kenyans.
