Safaricom Mali Investment Tool Finally Open to the Public

After a prolonged period of limited access and probable sandbox testing, Safaricom’s investment product, Mali, is now live and seemingly available to all M-Pesa users. This marks the end of several years of closed testing, regulatory reviews, and gradual improvements that shaped the product into what it is today.

Mali – the journey from 2019

Mali was first announced back in December 2019, when Safaricom revealed its plans to allow M-Pesa users to invest in unit trusts with as little as KES 100. The initial concept was simple: offer an investment option that could work seamlessly within the M-Pesa ecosystem, letting customers earn interest on their deposits without the complexities associated with traditional investments. At the time, the product was seen as a game-changer, given that the minimum investment was so low and the promised interest rate was attractive at 10% per year.

However, despite the early excitement, Mali never officially launched in 2019. What followed was a period of limited access, where only a few users could interact with the platform, leaving many waiting for the product to fully go live. In that initial phase, Mali was more of a concept than a product.

In November 2022, Safaricom quietly activated Mali for a small group of users. Though it wasn’t advertised widely, anyone who knew where to look – mainly within the M-Pesa app – could see that the service had started to take shape. By this point, thanks to FAQs and Safaricom Website details, we got to know that Safaricom had partnered with Genghis Capital, who would serve as the fund manager, with KCB Bank as the trustee and SBM Bank as the custodian.

Despite this progress, Mali wasn’t yet fully available to the general public – people who tried joining kept being told to wait for approval. It remained somewhat of a pilot program, possibly operating within a regulatory sandbox under the Capital Markets Authority (CMA). For those who could access it, the core features were already there: low investment thresholds (starting from KES 100), daily interest accumulation, and no transaction fees for deposits or withdrawals. However, others who attempted to sign up were told to wait as the platform wasn’t fully rolled out.

The Sandbox Phase and User Experience

From late 2022 through early 2024, Safaricom Mali remained in this sort of beta phase. Users who managed to sign up during this time reported mixed experiences. On one hand, Mali offered convenience: deposits and withdrawals were instantaneous, the app was simple to use, and the process was hassle-free. However, there were also notable downsides. Some users faced technical issues like balance inconsistencies, withdrawal delays, and sluggish app performance.

One of the issues remains the arguable lack of transparency around fees – though this isn’t something major. While deposits and withdrawals were free, the charges related to fund management were embedded within the overall returns. Users aren’t provided with a clear breakdown of how much was being deducted for the management fees, which include Genghis Capital’s 2% per annum fee, KCB Bank’s 0.2% trustee fee, and SBM Bank’s custodial fees – according to the FAQs then.

March 2024: A New Look, a Step Closer to Public Rollout

In March 2024, Mali underwent a significant visual and functional update. The interface was refreshed, moving from the earlier blue color scheme to a green one, and a new logo was introduced. The updated app interface provided a more intuitive layout, with clearer displays of user balances, interest earned, and investment performance over time. For early users, these updates signaled that the platform was getting ready for a wider rollout, and that Safaricom was moving closer to fully opening up Mali.

However, even at this stage, new signups were still limited. Those who hadn’t joined earlier were stuck waiting, while the lucky few who were already using the platform could continue investing.

Mali Now Open to Everyone

As of today, 4th September 2024, Safaricom Mali is seemingly finally open to the public – we have tried with 6 people who all got admitted immediately. This means any M-Pesa user can now sign up, invest, and start earning interest without waiting for invitations or limited access. The product functions similarly to how it did during the sandbox phase: users can invest as little as KES 100 and as much as the M-Pesa daily transaction limit allows. Deposits and withdrawals remain instantaneous, with no transaction fees involved, and interest is credited daily.

For those unfamiliar with how Mali works, here’s a basic outline:

• Investments: You can invest between KES 100 and KES 300,000 daily, depending on your M-Pesa limits.
• Interest: The annual interest rate is promised to be a competitive 10%, though this is subject to change depending on market conditions.
• Fees: While there are no transaction costs, be aware that there are fund management fees, trustee fees, and custodial fees, which are deducted from your interest before you see it reflected in your account. There needs to be a more open UI showing these fees.
• Withdrawals: You can withdraw your funds partially or fully at any time, directly to your M-Pesa account taking in to consideration M-Pesa wallet and transaction limits.

One important thing to keep in mind is that, despite the ease of access and the convenience, this is still an investment product. There are inherent risks involved, and while your principal investment is relatively safe in a unit trust, returns can fluctuate based on market conditions.

With Safaricom Mali now open to everyone, the company has expanded its financial offerings, making investment opportunities more accessible to the average M-Pesa user. It’s a step towards financial inclusion, but as with any financial product, it’s important to approach it with a clear understanding of the risks and limitations. While Mali may not be the perfect solution for every investor, it offers a compelling option for those looking to start small and gradually build their investment portfolios with ease.