Back in 2019, Safaricom launched a unified platform called ‘Mali’, a Swahili word that translates to ‘property’. This Safaricom unit trust enables small investors to purchase investments at a small fee of as low as Ksh.100. This Mali unit trust investment then gains interest daily, for as long as your money is invested. This article will therefore take you through the Safaricom Mali Unit Trust, explain how to apply, and invest and give a detailed list of pros and cons you should consider before delving into it.
Requirements needed to apply for Safaricom Mali
- You must be at least 18 years old – Financial decisions require sound judgement, thus the age limitation. As you can imagine, you will need to have a National ID or passport to be able to apply for this Mali Unit Trust.
- You must have a registered Safaricom line that has been active for at least three months.
The minimum amount of money needed to apply for Safaricom Mali
To apply for Safaricom Mali, you will need Ksh.100 only.
On the upper limit, the maximum amount of money you can invest per day in Safaricom Mali is Ksh.300,000. This goes hand in hand with the M-Pesa transaction limit which is around Ksh.300,000.
If, for instance, you want to invest Ksh.2 million in the unit trust, you will need at least 7 days to deposit the entire figure in the Safaricom investment option.
How to apply for Safaricom Mali Unit Trust and Make Profit
- Dial*230# in your Safaricom line/sim card. If this USSD code has a problem, dial *334# instead, and navigate to option 5 (Financial Services).
- You will see several options. Select ‘MALI’.
- Accept the Terms and Conditions.
- Enter your M-Pesa Pin.
- Proceed to give relevant details as required by Safaricom.
If you choose to invest with the Safaricom App, navigate to the ‘Invest with Safaricom’ section and select the MALI option. Proceed with the application process to the end.
How much profit will you make from Safaricom Mali?
Safaricom Mali offers daily interest on your investment, which will be compounded at the end of the year.
It gets better!
Safaricom Mali allows you to withdraw part of or your entire principal amount with your interest at any time of day or night. Furthermore, there are no transaction charges placed on any withdrawal you make.
What is the interest rate of Safaricom Mali?
Safaricom Mali offers a 10% yearly interest return on your principal amount. However, you will need to take into account taxes imposed by the government. Therefore, your interest per year may be lower than the percentage mentioned earlier.
As you earn with Safaricom Mali, you will need to cater for fees that you will subtract from your gross income so as to approximate your expected returns.
Also, read Top Microfinance Institutions In Kenya.
Fees charged include;
- Management fees – According to Investopedia, a management fee is charged by an investment manager/professional who is in charge of an actively managed fund such as the Mali Unit Trust. Safaricom uses Genghis Capital, to manage this MALI investment. They will charge you a 2% per annum management fee. This fee is usually charged under the Assets Under Management (A.U.M).
- Trustee Fees – Trustees are liable/take charge of certain assets on behalf of a different company. In this case, KCB is the trustee that will be charging a 0.2% per annum trustee fee.
- Custodial Fees – When a bank appoints another bank as a custodian of your funds, then you will have to pay the bank. In the case of Mali, custodian fees are at 0.15% per annum.
- 15% tax on the profit earned.
The fees listed above are calculated out of the total amount of money you hold in your Mali Unit Trust fund before you start earning anything.
Let’s do the math…
Say you invested Ksh.100,000
Management fees:
Ksh.100,000 × 2% = Ksh.2,000
Trustee Fees:
Ksh.100,000 × 0.2% = Ksh.200
Custodial Fees:
Ksh.100,000 × 0.15% = Ksh.150
The sum of Total Fees Charged:
Ksh. 2,350
At the end of the year, after making a 10% profit, your gross amount will be Ksh.110,000. Subtract your fees and you will end up with Ksh.107,650.
Now let’s calculate the net income after deducting the 15% tax.
Gross amount – {(Gross amount – Principal amount) × 15%} = Net amount
Ksh.107,650 – {(Ksh.107,650 – 100,000) × 15%} = Ksh.106,502.5
Percentage profit?
[(Net amount – Principal amount) ÷ Principal amount] × 100
(Ksh.6,502.5 ÷ Ksh.100,000) × 100 = 6.502% net profit.
Please note that the above calculation is just a rough estimate, and could vary according to policies set by Safaricom. Further, the correctness of the calculation is not guaranteed and therefore, make an effort to call Safaricom Customer Care.
DisclaimerConclusion
If your money is just lying around with no value being added to it, investing in Safaricom Mali could be the next best deal for you.
This is not financial advice, but rather, an exposure article set to inform you.
