The country’s largest telecoms operator in terms of market share, Safaricom, on Thursday announced that it was testing a new mobile savings service, seeking to broaden its successful M-Pesa mobile money platform.
Policymakers say Kenya suffers from a low national savings rate and analysts said Safaricom could be looking to target that untapped market with the new product, dubbed “Mali”.
Mali, which will be capped at 70,000 shillings ($690) per saver, will offer an interest rate of 10% per year, higher than that offered by commercial banks, the Business Daily newspaper reported.
Safaricom confirmed it was testing a savings product called Mali, but did not comment on the other details in the newspaper report.
“If it comes on board, it will be a game changer to the ordinary Kenyan. It should do well for their returns,” said Lisa Kimathi, an investment analyst at Standard Investment Bank.
M-Pesa, which allows users to send and receive cash, and pay for goods and services even on basic feature phones, has powered the company’s earnings in recent years.
Last month, the firm’s interim Chief Executive Michael Joseph revealed that the telco is contemplating on whether to reduce the interest rates on its M-Pesa overdraft facility, Fuliza and M-Shwari. Safaricom’s bid to reduce Fuliza and M-Shwari charges concurs with the multiplying of unregulated micro lenders in the country in response to the growth for demand of cheap loans.
Without disclosing the timeframe and charges that may be reduced, Mr. Joseph underscored that the move was in line with the telco’s strategy to introduce affordable new services such as insurance and wealth management on its M-Pesa platform.
“I would like the cost of this service to come down and Safaricom is working to that end. It’s a regulated activity; certainly we will push to find ways to make it cheaper. What we want to do is provide more services on M-Pesa that will make life easier for our customers. You know these things like buying insurance, investing in wealth management, making it easy for businesses to access M-Pesa so they can have their own back office on M-Pesa,” the acting Safaricom said in a statement then.