Kenyan fund manager’s customers to pay using M-Pesa

Old Mutual Kenya has signed a partnership deal with a mobile money transfer service provider as its move to penetrate the mass market gets into top gear.
The partnership with Safaricom’s M-Pesa service will enable investors to top-up their unit trust investment monthly contributions thus creating an ease of access and convenience.

“For a service that has changed the lives of millions of Kenyans, we expect M-Pesa to help us penetrate the mass market in our bid to offer Kenyans reliable investment products,” said Old Mutual Kenya chief executive Mr Bertie van der Walt.

Old Mutual’s Toboa is an investment plan targeting Kenyans who are ready to invest a minimum of Sh7,500 per month. Clients will be registered M-Pesa users.

For those already on the Toboa Investment Plan, it will cost Sh30 to send the required monthly top-up to the investment firm.

Recently, the financial services firm also partnered with the Postal Corporation of Kenya to use its money transfer service. Old Mutual investors can now pay their contributions through Postapay’s 300 outlets countrywide.

Since the entry of unit trusts into the Kenyan market five years ago, most people have viewed them as elitist, a perception the fund manager is trying hard to shrug off.

Initially, Old Mutual unit trust product cost Sh500,000 as the minimum entry amount but the figure dropped to Sh200,000 in September last year. In July 2008, the Toboa plan hit the market with an investment package worth Sh7,500.

Raised storm

Launched in March last year, the uptake of M-Pesa service has risen remarkably and raised a storm within banking industry as the latter view the former as an encroachment onto its turf.

M-Pesa also operates on a regulatory grey area between the financial and telecommunication realms.

Despite the backlash by banks, Safaricom is undeterred and continues to add incentives on this service.” We are not worried by criticism since our focus is on the unbanked Kenyans,” said Safaricom CEO Michael Joseph.

Daily Nation