This archive report was first published on 5 December 2019.
Published on December 5, 2019, Safaricom has launched a new savings service on its M-Pesa platform, aiming to compete with traditional banks.
The new service, called Mali, allows M-Pesa users to invest and earn a 10% annual interest rate, which is calculated daily. The savings cap is set at Sh70,000, and users can invest money through the USSD code 230# or via a PayBill number.
According to a top Safaricom executive, the product is designed to encourage savings where users can put in money and withdraw it the next day, earning interest on the money.
Standard Investment Bank views the combination of lending and wealth management services as a further boost to earnings from financial services, saying that the product may include a partner bank and a fund manager.
M-Pesa, which has around 20 million active users in Kenya, has become the principal driver of Safaricom's profit growth, with revenue from traditional voice and text services flattening off.
The new savings product does not have lock-in restrictions, unlike M-Shwari, a savings product offered by Safaricom in partnership with NCBA, which requires users to lock in their funds for between one and 12 months.
