Safaricom is seeking approvals from the government to launch insurance, unit trust and saving products as it races for a larger piece of the financial services market. This would also help the firm tap more earnings from mobile money platform M-PESA.
The telo has been testing the three products dubbed Bima (Insurance) and Mali (mobile savings) as well as a unit trust investment product and now just awaits regulatory permission to officially launch.
The approval is set to come from three institutions, Capital Markets Authority (CMA), Central Bank of Kenya (CBK) and the Insurance Regulatory Authority (IRA).
The launch of these products would seem ambitious but reasonable enough as Safaricom looks to extend its streams of revenue after a half-year that was not as ideal.
The growth strategy from the firm hinges on widening M-PESA offerings and bolster its data business by switching about four million 2G and 3G phones to 4G.
According to Safaricom’s CEO Peter Ndegwa, the telco wants to tap into M-Pesa’s 26.7 million active customers that transact about KES 1.5 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.
The mobile savings service, Mali, will offer customers interest rates of 10% on deposits capped at Sh70,000 per saver based on a pilot test.
At 10%, the return from Mali is nearly double the current interest rate that banks are paying on savings.
There are no clear details about the unit trust although it is expected to partner with a fund manager already licensed by the CMA, who will also approve the new product.