Can Safaricom’s Ziidi MMF Be Kenya’s Investment Game-Changer?

• By Clinton Wanjala

• 266

• Nov 28, 2024

When I heard the news that Safaricom, through MPESA, had started a money market fund program called Ziidi, I got curious. For years, Safaricom has been a game-changer in the financial sector, introducing innovative solutions that have disrupted traditional markets. Think about MPESA—an idea that turned Kenya into the Silicon Savannah of Africa.

So, with this new initiative, the Ziidi Money Market Fund (MMF), what changes will it bring to the investment landscape? Will this fund outshine competitors like Cytonn, CIC, and Britam MMFs to become the best Money Market Fund in Kenya? These were the questions racing through my mind as I started digging deeper.

What is Ziidi Money Market Fund?

Ziidi is Safaricom’s latest innovation in the financial sector, introduced as a Collective Investment Scheme (CIS). Accessible through MPESA, it aims to make investing easy, convenient, and affordable for ordinary Kenyans with its tagline "Make Your Money Work." It allows users to invest as little as Ksh 100 and promises competitive returns.

According to the Capital Markets Authority (CMA), Safaricom has partnered with Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited to manage the fund. CMA’s CEO, Mr. Wyckliffe Shamiah, described Ziidi as a milestone in financial innovation and a tool to support Kenya’s financial inclusion strategy, especially during these tough economic times under President William Samoei Ruto.

What Makes Ziidi Unique?

Unlike traditional MMFs, Ziidi is fully integrated with MPESA, a platform already trusted by millions of Kenyans. This gives it an edge in accessibility and convenience.

Key features include:

• Low Entry Barrier: With just Ksh 100, anyone with a Safaricom line and has access to MPESA can start investing.
• Ease of Access: No paperwork; everything is done through your phone either through MPESA app or by dialing USSD *234#.
• Real-Time Transactions: Deposit and withdraw funds seamlessly. You can deposit and withdraw funds instantly at any time. 
• Diverse Management Expertise: Managed by leading financial institutions.

Ziidi targets everyday Kenyans who might not have considered investing before. It’s this democratization of investment that sets it apart.

Ziidi vs. Competitors

How does Ziidi stack up against other MMFs like Cytonn, CIC, and Britam? Here’s a quick comparison:

*TBD: To Be Determined

From this table, you can see Ziidi’s advantage in accessibility and instant transactions. However, its interest rate has not yet been stated.

Why Did Safaricom Start Ziidi?

After more research, I discovered that Ziidi is a replacement for Mali, a similar investment product that Safaricom had tried to launch but shelved due to regulatory challenges. Ziidi addresses these issues and offers a more robust framework through its partnership with established investment firms.

But why did Safaricom persist with this idea? The answer lies in financial inclusion. Safaricom has always been at the forefront of making financial services accessible to all Kenyans. With Ziidi, they aim to bring more people into the investment fold, especially those who found traditional MMFs out of reach.

The Potential Impact of Ziidi

1. Empowering Small Investors
   For many Kenyans, the biggest barrier to investing is the perception that it’s only for the wealthy. Ziidi changes this by allowing anyone with a phone and Ksh 100 to participate. Investing in a money market fund is a very good form of investment, especially with its compounding effect. 

2. Growing Financial Literacy
   As more people start using Ziidi, Safaricom could indirectly promote financial education and literacy. Users will learn about saving, compounding interest, and long-term wealth creation.

3. Pressure on Competitors
   Ziidi’s user-friendly model might push other MMFs to simplify their processes and lower their entry barriers to remain competitive. Currently, majority of the MMFs require an initial deposit of 5,000 which might not be very affordable to many Kenyans from low socio-economic families. 

4. Boosting the Economy
   By encouraging a culture of saving and investment, Ziidi could contribute to the growth of Kenya's economy.  

Challenges Ziidi Might Face

No innovation comes without its hurdles. For Ziidi, these include:

• Transparency: Users will demand clarity on fees and returns.
• Competition: Established MMFs with proven track records will pose a challenge to Ziidi because its new.
• Market Risks: Like any investment, Ziidi is subject to market fluctuations which might affect its performance.

As a result, Safaricom will need to address these challenges to build trust and ensure Ziidi’s success.

How to Get Started with Ziidi

If you’re ready to join the Ziidi revolution, here’s how you can get started:

1. Open your MPESA app and go to the “Financial Services” section, here you will see Ziidi in the first spot, followed by Mali, Report Fraud and MPESA Ratiba.
2. Select “Ziidi Money Market Fund.”
3. You will then be prompted to enter your pin after which the Ziidi dashboard will open.
4. After the Ziidi dashboard has loaded, you will see clear instructions on depositing and withdrawing. However, since it is not yet operational, there is a coming soon prompt displayed currently. 

Can you believe It’s that simple?

Conclusion: A New Dawn for Investments in Kenya?

Ziidi has the potential to be a game-changer for Kenya’s investment industry. Its accessibility, low entry barrier, and integration with MPESA could bring millions of Kenyans into the investment world. But whether it becomes the best MMF in the market will depend on how it delivers on its promises.

So, is Ziidi the future of investing in Kenya? Time will tell. For now, it’s a step in the right direction—a move that could redefine how Kenyans grow their wealth.

Are you ready to invest with Ziidi and take charge of your financial future? Let me know your thoughts in the comments!