M-Pesa customers who avoid interest-bearing products for religious or ethical reasons now have a savings option inside the wallet they already use. Safaricom and Gulfcap Investment Bank on October 6 launched the Ziidi Shari’ah Money Market Fund.
Customers can join through My OneApp or by dialling *334#. The first deposit is Sh100 and later top-ups can be as small as Sh10. There is no upper limit on the amount invested, though normal M-Pesa caps apply: Sh250,000 per transaction and Sh500,000 a day.
How the returns are earned
Conventional money market funds earn most of their returns from interest on Treasury bills, bank deposits and corporate paper. A Shari’ah fund cannot hold interest-paying assets, so this one places money in short-term instruments with Shari’ah-compliant banks.
“The fund invests exclusively in short-term, highly liquid instruments in shari’ah compliant banks. This preserves capital and daily liquidity, while ensuring returns are free of interest (riba) and are earned only from ethical, permissible activities,” said Saud Shahbal, chief executive of Gulfcap Investment Bank.
Deposits are free, profits are shown daily and withdrawals back to M-Pesa carry no charge, according to Safaricom. Savers can also lock funds for a period to avoid dipping into them.
What savers should check
Returns on money market funds are not guaranteed and vary with the underlying assets. Anyone comparing Ziidi Shari’ah with conventional funds should look at the net yield after fees, which fund managers publish, rather than headline figures. Islamic products also tend to offer a narrower menu of assets, which can affect returns when interest rates move.
The product builds on the original Ziidi fund, which Safaricom introduced to bring money market investing to the M-Pesa menu. Placing a Shari’ah version alongside it widens the pool of potential savers, particularly in Nairobi, Mombasa and North Eastern Kenya, where demand for Islamic finance is strongest.
For Safaricom, it is another step in turning M-Pesa from a payments and transfers service into a place where customers save and invest. The operator is adding features steadily: this month alone it has introduced balance-hiding Jumbe receipts and AI-assisted payments in My OneApp.
Sources: Safaricom | The Standard | Capital Markets Authority
Photo: Ruslik0 / Wikimedia Commons (CC BY-SA 4.0)
