Kenya's Capital Markets Authority (CMA) has given the green light to Safaricom's second money market product, Ziidi, which is set to revolutionize the country's digital investment landscape. The new product, launched in partnership with Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited, aims to provide accessible and diversified investment options to Kenyans.

Ziidi's launch comes on the heels of Safaricom's first money market fund, Mali, which was introduced in 2019 in partnership with Genghis Capital. Mali's asset base has grown to KES 3 billion ($23 million) as of November 2024, demonstrating the demand for digital investment products in Kenya.

The CMA has hailed Ziidi as a significant step towards achieving the National Government's financial inclusion goals. By leveraging Safaricom's extensive network, Ziidi will target the country's expanding retail investment market, driven by smartphone adoption and digital literacy. Kenya boasts over 35 million active smartphones, compared to 30 million feature phones, creating a vast potential market for digital investment products.

Ziidi will compete with traditional banks, insurers, and fintechs by channeling money market deposits into low-risk investments such as government bonds and T-bills. This move is expected to empower unit holders by offering accessible and diversified investment options, ultimately driving financial inclusion in Kenya.

Safaricom's mobile money product, M-PESA, has been instrumental in driving financial inclusion in Kenya, earning KES 77.22 billion ($596 million) in revenue in the first six months of 2024. Ziidi is the latest addition to M-PESA's offerings, supporting the mobile money product's growing service revenue and diversifying revenue streams beyond telecoms.

While details on Ziidi's interest charges and tax obligations are yet to be disclosed, Safaricom's Mali product offers investments from as low as KES 100 ($0.77), with a daily cap of KES 300,000 ($2320) and top-ups ranging from KES 100 ($0.77) to KES 70,000 ($540). Withdrawals are instant to M-PESA wallets, with fees including a 2% annual fund manager fee, 0.2% trustee fee, 0.15% custodian fee, and a 15% withholding tax on interest earned.

The launch of Ziidi marks a significant milestone in Kenya's fintech landscape, offering a low-risk investment option for savers dissatisfied with low bank rates. As Safaricom continues to expand its financial services, Ziidi is poised to play a critical role in driving financial inclusion and diversifying revenue streams for the telecom giant.