Safaricom is undecided on when to commercially roll out a new savings service on its M-Pesa platform that the telecoms operator has been testing for weeks.
Acting CEO Michael Joseph said the firm had completed testing the new product, dubbed “Mali” (Kiswahili for wealth), but its fate remains unknown.
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Mali, which has capped savings at Sh70, 000 per saver, will offer an annual interest rate of 10 percent, higher than what is offered by commercial banks.
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.
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“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,” said Mr Joseph in an interview with the Business Daily without giving more details. At 10 percent, the return from Mali is nearly double the current interest rate that banks are paying on savings. Official data shows that average savings interest fell to 4.58 percent in September compared to 6.33 percent in the same month last year when Parliament made changes to the banking law and removed a clause that compelled banks to pay depositors at least 70 percent of the base lending rate.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world