The unit trust market in Kenya continues to attract the biggest financial service providers, and one of its recent additions is tech giant Safaricom. Through the Safaricom Mali unit trust, willing investors can buy stakes or units and earn interest income and dividends.
The Mali unit trust, launched as a pilot program in 2019, requires a minimum investment of Ksh 100 and a maximum of Ksh 300,000 per day, and the investment has an annual return rate of 10%.
Meanwhile, you can top up anything from Ksh 100 to about Ksh 70,000 daily. The fund manager, Genghis, charges a 2% fee per annum, while the Trustee, KCB, takes 0.20% per annum. But still, there are a few other charges which I’ll discuss elaborately later.
Generally, here’s what I’ll cover about Safaricom Mali:
- What is Safaricom Mali?
- How does the Mali unit trust work?
- What are the basics of the unit trust fund?
- Why invest in the Mali Unit Trust?
- What are the downsides of the Mali Unit Trust?
- How do you open a Mali Trust fund account?
- What are the Mali Unit Trust terms and conditions?
- What are the requirements for joining the Mali Unit Trust?
Let’s jump into it!
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In a hurry? Below is a mail Unit Trust Fact Sheet to check out.
Safaricom Mali Fact Sheet
|Fund Type||Unit Trust|
|Pilot Launch||December 2019|
|Custodian||SBM Bank Kenya|
|Regulator||Capital Markets Authority|
|Average Interest Rate||10% annually|
|Minimum Investment||Ksh 100|
|Maximum Investment||Ksh 300,000 per day|
|Top-Up Limit||Ksh 100 – Ksh 70,000|
|Fund Manager Fee||2% per annum|
|Trustee Fee||0.2% per annum|
|Custodian Fee||0.15% per annum per Ksh 10,000|
|Withholding Tax Rate||15%|
What Is Mali in Safaricom?
Safaricom Mali is a unit trust investment vehicle by telco giant Safaricom and investment powerhouse Genghis Capital, where investors (known as unit holders) earn daily interest from their pooled money. Genghis is the trust fund’s official money manager and was launched as a pilot program in December 2019.
Mali is available to all Safaricom users with an MPESA account that has been active for over three months and only requires a minimum investment of Ksh 100. You can top up a similar amount or more.
How Does Safaricom Mali Work?
As a unit trust, Safaricom Mali has a fund manager, also known as an administrator or money manager, whose identity is Genghis.
Genghis’ job is to manage the fund and invest the pooled funds wisely for the best return. Genghis, however, does not hold the pooled funds. That is the job of a Capital Markets Authority-approved custodian, SBM Bank.
But to ensure that the fund manager protects the investors’ money and complies with the regulator’s (The Capital Markets Authority) guidelines, a trustee (who in this case is KCB Bank) comes in.
As a unit fund, Mali is regulated by the Capital Markets Authority (CMA), making it low-risk. Every investor is a unit holder, and each unit you hold represents your investment in the fund.
That means you can trade off your units for income. However, that’s not the only way to make money. Most unitholders make money from interest income and dividends. The average annual Safaricom interest rate is 10% which is not bad for long-term investments.
The Basics of the Mali Unit Trust Fund
Here are some basics worth knowing about Mali unit trust.
Safaricom Mali Interest Rate
Mali Unit Trust accounts currently attract an average annual return of 10%. The interest, however, accrues daily, making it easy to withdraw anytime.
Safaricom Mali Charges
Mali Unit Trust accounts attract these charges:
- 2% administrator’s/fund manager’s fee (which Genghis charges per year)
- 0.2% Trustee fee (which KCB charges per year)
- 15% withholding tax (which the government imposes on the investment fund)
- 0.15% custodian fee, which SBM bank charges per annum per Ksh 10,000 monthly.
Investment Limits and Top-Up
Mali requires a minimum deposit of Ksh 100 and a maximum of Ksh 300,000 per day as an investment. As for top-ups, you can top up anything from Ksh 100 to Ksh 70,000.
To sign up for Mali as an investor, you must meet these conditions:
- Be a registered Safaricom customer
- Have an MPESA account that has been active for at least three months
- Be at least 18 years (with a valid Kenyan ID)
Mali Safaricom Terms and Conditions
Click here for a complete list of Mali trust terms and conditions, but part of them include:
- You must be at least 18 and an active MPESA subscriber/customer for at least three months to qualify for Mali
- You must allow the fund manager to use your personal information concerning your account
- The fund manager has the right to terminate the contract if you breach any of its service terms and conditions
- The fund manager has the right to amend the terms and conditions occasionally legally.
Safaricom allows you to withdraw funds from your Mali Unit Trust account by dialing *334#. You then need to pick the withdrawal cash option and follow the steps to complete the withdrawal.
Why Invest in Mali Unit Trust?
Since Mali only launched as a pilot program in 2019, it doesn’t enjoy a more extended market reputation like most unit trusts or money market funds in Kenya.
So, it’s normal to wonder if the Safaricom money market fund investment is worth it. Well, Mali is worth it due to the following advantages:
- Good return – Yearly, Mali attracts a 10% return which is not bad for a long-term investment. The interest, however, accrues daily to allow any time withdrawals
- Instant withdrawal – Mali allows you to withdraw funds anytime and enjoy partial or complete instant withdrawals. Partial withdrawals happen when you exceed your daily withdrawal limit. But still, the funds are only rolled over to the next day.
- Low investment limit – It only takes a minimum deposit of Ksh 100 to invest in Mali Trust, and you can top up anything up to Ksh 300,000 per day.
- No transaction fee – According to Safaricom, Mali transactions are free. So other than the usual fees already discussed, you don’t pay anything when transacting with Mali.
- User-friendly interface – If you can use MPESA or MySafaricom app to access your Mali account, the whole experience is seamless. The app offers a simple yet interactive interface to access your account quickly.
- Low risk – Mali is certified by the Capital Markets Authority. Moreover, the fund manager is experienced in the unit Trust sector, resulting in a low-risk unit trust investment.
- Professional management – The fact that Genghis is the fund manager means you can count on their market experience to run the fund professionally. They are part of why the investment risk is low.
On a negative note, here are the concerns that come with Mali investment:
- Numerous fees – The biggest problem with Mali is the fees you’ve to incur, ranging from the fund managers and custodial fees to the Trustee’s fee and withholding tax.
- Returns not guaranteed – No unit trust can guarantee returns, not even Mali, by Safaricom. The fund manager is not liable for the effects the market forces, such as inflation, have on the product, which brings about the unpredictability element.
- Insufficient information – Though Mali is a product by tech giant Safaricom and renowned fund manager Genghis, there’s very little information online about how they operate. You also cannot get enough on the app.
How to Open Safaricom Mali Account
When it comes to opening a Mali Unit Trust, you have these two options:
1. Safaricom Mali USSD
Mali allows you to sign up for an investor’s account by dialing either *230# or *334#. You then need to select Financial Services and then Mali to opt in. You need to enter your MPESA pin and other personal information, such as email address and contact of the next kin, and then pay via Pay Bill or USSD.
2. Safaricom Mali App
You can use the MPESA or MySafaricom app to sign up for a Mali account. This option is for those with smartphones, and it involves these steps:
- Install the MPESA or MySafaricom App on your phone and launch it
- Tap on the services tab and pick Mali
- Opt into the unit trust and complete the sign-up
People Also Ask
1. Is Safaricom Mali Good?
Safaricom Mali has a few advantages that make a good unit trust. That includes a decent return rate of 10% per annum, fast withdrawal, low top-up, and investment limit, among others.
2. How Do I Withdraw from Safaricom Mali?
You can easily withdraw funds from your Safaricom Mali account by dialing *334# and then choosing to withdraw cash. The withdrawal is mostly instant unless it’s larger, which may spill the next day.
3. How Much Interest Does Mali Safaricom Earn Per Day?
Mali Unit Trust by Safaricom earns an average annual interest rate of 10%, which accrues daily. But overall, the higher the investment, the greater the yield, even though the rate is the same.
There’s no doubt that Safaricom Mali is a worthy investment vehicle for those looking to invest in a unit trust. The fund is low risk, enjoys fast withdrawal, and has a reasonable yield rate, and that’s all you want as an investor.
It, however, does not negate the obvious concerns, such as the high fees. So you also have to factor that in when making the decision. Consider talking to us on social media if you need any clarification on the Mali unit trust or any other unit trust investment, and we’ll be happy to assist.