A woman stands outside a Safaricom shop on Kimathi Street on July 4, 2019. PHOTO | SALATON NJAU | NMG Safaricom is seeking regulatory approvals to launch insurance, unit trust and saving products as it races for a larger piece of the financial services market and tap more earnings from mobile money platform M-Pesa.
The telco has been testing the three products dubbed Bima (Insurance), Mali (mobile savings) and a unit trust investment product.
Now, the giant telco has sought approvals from regulators — Capital Markets Authority (CMA), Central Bank of Kenya (CBK) and the Insurance Regulatory Authority (IRA) for commercial launch of these products.
This is the latest plan to grow the mobile money platform beyond sending and receiving cash, tapping loans as well as paying for goods to include insurance and wealth management. Safaricom growth strategy hinges on widening M-Pesa offerings and bolster its data business through switching about four million 2G and 3G phones to 4G to offset a fall in revenue from mobile calls amid a saturated market.
Safaricom CEO Peter Ndegwa says the telco wants to tap into M-Pesa’s 26.7 million active customers that transact about Sh1.5 trillion a month to grow the savings, unit trust and insurance products.
“We are exploring the area of wealth management. We have developed a couple of products and we are seeking regulatory approval. Until the approval is given, we may not want to announce the specifics of the products,” said Mr Ndegwa.
Mr Ndegwa says the telco wants to use the new products as part of the strategy to broaden M-Pesa into a financial service provider that will rival banks, insurance firms and fund managers.
Mali (Kiswahili for wealth), will offer interest rates of 10 percent on deposits capped at Sh70,000 per saver based on a pilot test. It started testing the savings product in December.
Policymakers say Kenya suffers from a low national savings rate and analysts said that Safaricom could be looking to target the untapped market with the new savings product.
At 10 percent, the return from Mali is nearly double the current interest rate that banks are paying on savings.
Safaricom did not divulge details of the unit trust product, but it is expected to partner with a fund manager already licensed by the CMA, who will also approve the new product.The product will generate new revenues from M-Pesa with Safaricom expected to earn fees from the wealth management service.Kenya, like many other […]