This archive report was first published on 5 December 2019.
Safaricom's New Savings Service: A Threat to Kenyan Banks? ¶
Kenyan banks may face stiff competition in the coming days as Safaricom, the country's leading telecommunications company, prepares to launch a savings service targeting M-Pesa users.
According to Safaricom, the new service, dubbed 'Mali' (meaning 'wealth' in Swahili), is currently in its early testing phase and is expected to allow users to invest and earn a 10% yearly interest on a daily accrued basis.
Customers will be able to invest money through the USSD code 230# or via a PayBill number, with a maximum savings cap of KSh 70,000.
The service is aimed at allowing subscribers to invest easily without exit restrictions, making it a convenient option for those looking to save and earn interest on their money.
As reported by Safaricom on its Twitter page on December 5, 2019, the company is exploring options to diversify income from M-Pesa since its launch 12 years ago.
"Since we launched M-Pesa 12 years ago, the service has continued to grow driven by our focus on the needs of customers. We are exploring various innovations and one of them is Mali is that is currently in an early testing phase and still subject to ongoing engagement with relevant regulators for approval," Safaricom tweeted.
The new service is expected to be a game-changer for Safaricom, which has already seen significant growth from its M-Pesa service. In the first half of 2019, Safaricom's profit was driven by M-Pesa, which grew by KSh 6.5 billion.
With the launch of Mali, Safaricom is poised to take on the Kenyan banking industry, offering a convenient and accessible savings option to its customers.
