Safaricom Marks 18 years of M-PESA with money market fund

Telecommunication service provider Safaricom yesterday launched Ziidi, a wealth management product that is set to disrupt the country’s retail investment sector.

Speaking yesterday during an occasion to celebrate 18 years of M-PESA, Safaricom CEO Peter Ndegwa said the firm will continue investing in the platform to provide a one-stop-shop for subscribers’ financial needs.

“Today we are recording up to 4,000 transactions per second on M-PESA and we are working to get this up to 10,000 which is informed by our customers’ needs and what they have come to expect from the platform,” said Safaricom CEO Peter Ndegwa.

The Ziidi Money Market Fund (MMF) allows M-Pesa customers to invest in a money market fund from as low as Sh100 and earn a net return of 7 per cent. The service is available to users on both smartphones and feature phones with no charges or maintenance fees. 

“This is about how we think about our consumers’ behaviour, how they work with money and ensure that at each point we are offering a solution for them,” explained Ms Esther Waititu, Safaricom Chief Financial Services Officer.

“You earn money and we enable you to receive that money into your pocket, you spend it and M-PESA enables you to do this through the different payment solutions we have and today we have a solution that allows you to save and earn a return on the income that you have made,” she said.

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Data from the firm’s latest annual report indicates that the company recorded Sh1.85 billion in assets under management in the last financial year. The number of subscribers that had opted in during this pilot phase stood at 722,000, with 119,300 active users that saw the service record Sh13.4 million revenues.

The launch of Ziidi marks another milestone for the firm that is working to scale M-PESA into a financial juggernaut across the insurance, credit and wealth management sectors.

Last year the firm launched Ratiba, a standing order feature that allows users set automatic funds transfer from their M-PESA wallets on a daily, weekly, monthly, or annual basis to another person, or to pay recurring bills and subscriptions.

Data from the firm’s latest financial results indicates that revenue from M-PESA went up 20 per cent last year to Sh139 billion

The M-PESA Ratiba service promises subscribers a simple and seamless set up process with no penalties incurred for canceled or failed standing order transfers that may occur due to insufficient balance.

Yesterday’s launch coincided with the firm marking 18 years of M-PESA with former Central Bank of Kenya, CBK governors Prof Njuguna Ndungu and Dr. Patrick Njoroge graced the occasion.

The event was also graced by former minister for Information Communication and Technology Mutahi Kagwe, who was in charge of the docket at M-PESA’s inception.

“M-PESA’s runaway success did not receive much attention in the first days because it originated from Kenya and there is a perception that innovation comes from the West and is adopted in developing countries,” said Mr. Mutahi Kagwe.

“Today people are eager to associate themselves with this success and it is simply because Safaricom has proven that it works,” he said.

Safaricom’s founding CEO Michael Joseph recalled the frequent visits to government regulators and members of parliament to lobby for support for the new innovation and answer concerns over the platform’s impact on the economy.

“We faced stiff opposition and I remember banks in particular taking us to Parliament with some calling it a ponzi scheme,” he said.

According to Mr. Joseph, the success of the platform can be attributed to the willingness of boh Safaricom and government regulators to take risks and allow the innovation to run its course.

Data from the company’s latest annual report indicates that M-PESA recorded Sh139.9 million shillings in revenue last year, a 20 per cent growth year-on-year with Sh40 trillion transacted.

The number of active Lipa Na M-PESA merchants went up 4 per cent to 633,000 while those on Pochi La Biashara tills stood at 623,680.

Safaricom says the firm will embed greater usage of Artificial Intelligence (AI) and big data analytics to enable wider personalisation and improve M-PESA’s value offering in the next phase.