Mali by Safaricom is the latest product to be unveiled by the leading Kenyan telco company. It is a savings service and an investment driver powered by M-Pesa as the innovative mobile telecommunications company continues to explore the banking world. Mali is the Swahili word for wealth.
Safaricom did not get this Mali idea out of the blues, it falls among the so called ‘fast follower’. Similar products have been in the market for a while, such as the Cytonn Money Market Fund and M-Akiba. But the largest telco in Kenya will be banking on the convenience that M-Pesa offers and the brand loyalty the platform enjoys with the population in the strive for success. Safaricom announced the start of the piloting and testing phase of this new savings service on December 4, 2019 which ran up to towards end of the same month.
How does Mali by Safaricom work?
The question on your mind is definitely how Safaricom’s Mali works. You must be an MPesa registered user to benefit from Mali. You will be able to save as low as KES 100 and earn daily interest on your money.
How do you register for Mali? Safaricom plans to make the registration process easier through the Safaricom App and the SIM toolkit. The Mali USSD code *230# is being used during the piloting phase for subscribers of the company.
You will also need to provide a valid email address as well as the contact of a next of kin while registering.
Features of Mali by Safaricom
- The yet to be launched product will cap savings at a maximum KES 70,000 ($700) and a minimum KES 100 ($1).
- Mali interest rate will be 10 percent annually, nearly double what banks pay on savings accounts.
- A really interesting feature is that the savings also earn daily interest such that if you put in money and withdrew the very next day you will have earned an additional amount on it.
- Mali by Safaricom will also have no transaction costs for both deposits or withdrawals.
- The service will allow you to withdraw all or part of the money in your M-Pesa wallet instantly since it is an M-Pesa product.
- However, tax still applies to Mali. You will need to pay a 15% withholding tax on the interest earned.
Is Mali by Safaricom a disruptive service?
Mali appears to be the kind of product that will disrupt the markets in the fast-changing Kenyan banking sector. Kenya is ranked top in Africa in the use of technology for banking with Nigeria and South Africa in its trail, and if successful the service may change the savings and investments landscape. It offers a solution for Kenyans who want to save yet do not have bank accounts. It also removes the hassle of having to seek out an investment firm in order for one to invest.
Mobile loans applications and bank services apps take up a huge part of the money conversation, not only in the region but also globally. Deflecting the conversation from loans and debt to investment and savings is a clever idea. The telco already has a successful loans and savings app MShwari in collaboration with NCBA, as well as an overdraft MPesa service Fuliza in collaboration with KCB.
When will Mali be rolled out by Safaricom?
However, the future of the product is unknown as the company is yet to decide on when they would be rolling it out commercially.
“Mali was and is a trial with only Safaricom staff and a few customers. It has now been completed and we have yet to decide to launch it or not with the requisite approvals,” acting CEO Michael Joseph was quoted by Business Daily Africa.
It is not clear why the hesitation, and questions may arise as to whether MPesa’s products will at the end start competing against themselves. All the products have an underwriter and these may pose competitive problems possibly, for instance should NCBA be worried about the Mali product? While NCBA backed MShwari offers different interest rates on savings, for instance three percent on KES 20,000, four percent for KES 50,000, and five percent for any amount above KES 50,000 on savings which must be locked for at least 12 months, Mali does not have these restrictions and offers a higher interest rate.