Cashlet is helping millennials who are beginner investors to invest safely in selected money market funds.
The Kenyan Fintech which operates under the CMA regulatory sandbox is helping users save and invest with minimal capital.
In this review, we’ll take a look at some key features of Cashlet to find reasons why it might just be the Cashapp for investing in Africa.
Here we go.
Cashlet Savings & Investing
Cashlet is creating an innovative platform that gives users access to capital market assets through their mobile phone.
Via the Cashlet app, users can save and invest in exchange for competitive interests of up to 10%.
But Cashlet is not only designed for young ROI seekers, but also for users who want to set, track, and meet their financial goals all from one platform.
A little cash here and there, and you may just be on the highway to accumulate some mouthwatering compound interest.
How Does Cashlet Make Money?
Cashlet makes money by charging a monthly fee on select holders with a high balance threshold.
They also charge users a small amount for deposits and withdrawals.
It is not exactly clear if Cashlet makes a cut off profits made from investing funds into money market instruments, but it is expected that Fintech like Cashlet would hold a percentage of the profit from the investment pool.
How to Invest With Cashlet
To start investing with Cashlet, you have to download the Cashlet app on the Playstore, register and verify an account and make your first deposit.
The minimum amount to start saving and investing on Cashlet is Ksh 500 (~$5).
With Cashlet, users can deposit, invest, and withdraw at any time via M-Pesa. So, there’s no minimum investment tenure or obligation to stay invested on Cashlet.
Once invested, users will receive a daily earning of their annual ROI calculated on a pro rata basis.
How Much ROI Does Cashlet Offer?
It varies, depending on the choice of money market fund invested in.
Cashlet, however, claims that investors should expect to earn an annual return between 8% to 10%, paid daily.
Is Cashlet Legit or Scam?
Cashlet looks legit so far.
According to the Capital Markets Authority in Kenya (CMA), the Fintech qualifies as a startup offering innovative capital market solutions, with all its products authorized and regulated under the Regulatory Sandbox program of the CMA.
At least, this shows that the Fintech is under some form of regulatory compliance, which should put investors’ minds at rest.
What I Like About Cashlet
The most interesting thing about Cashlet is its low barrier to entry for beginner investors.
With just an equivalent of $5 users could start accessing some of the best money market funds in the Kenyan capital market.
I also like that the fund operates like a savings account, with returns paid daily and no obligation for users to stay invested.
What I Dislike About Cashlet
I think that the charges are just too much.
Apart from charging for withdrawals, deposits and other profit-sharing fees, the monthly charges on high balance users is hard to understand.
A charge of Ksh 40 ($0.50) on balances above Ksh 20,000 might be overboard. But maybe that charge covers for low-tier users who are able to use the platform free of charge.
Can You Lose Money With Cashlet?
Generally it would be difficult to.
Money market funds have a history for being low risk compared to other mutual funds.
The lower returns and short-term interest expected from money market funds shows that they are largely conservative in nature and are therefore less risky.
Funds invested with Money Market Funds on Cashlet are given out as loans to government, banks, and other financial institutions, which pay a daily interest on the investment balance.
Should You Invest With Cashlet?
This should be a good start for African millennials looking to put their money to work.
If you’re looking for a stable guaranteed income on your fund, then this could be a good way to achieve that.
At least, this should give a return higher than what many savings or fixed deposit accounts are currently offering.