Safaricom is prioritizing the promotion of Ziidi, its new money market fund, while remaining silent on the future of Mali, its 2020 fund. Controversy surrounds the migration of customers from Mali to Ziidi, igniting legal disputes with Mali’s fund manager. Despite significant growth in Kenya’s investment funds, the fate of Mali remains uncertain amid ongoing technical issues and customer dissatisfaction.
Safaricom, Kenya’s leading telecommunications company, has not disclosed any updates regarding the Mali money market fund, which it launched in 2020. Instead, the company is focusing on promoting Ziidi, its recently introduced fund, despite the lack of clarity surrounding Mali’s future. Ziidi, which obtained regulatory approval in November 2024, is a collaboration involving Safaricom, Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited.
The introduction of Ziidi has been controversial, particularly as customers remain uncertain about the status of Mali. During a media briefing celebrating M-PESA’s 18th anniversary, Safaricom announced that Ziidi has achieved over one million registrations and amassed KES 6 billion ($46 million). Reports indicate that some customers may have been transferred from Mali, leading to a legal conflict with Genghis Capital, Mali’s fund manager.
In December 2024, Genghis Capital accused Safaricom of migrating clients to Ziidi without their approval. Furthermore, they alleged that Safaricom had intentionally created a liquidity crisis to compel customers to withdraw from Mali amid ongoing ownership disputes related to the fund. Compounding this issue, persistent technical failures adversely affected Mali’s functionality in late December 2024 and January 2025, inhibiting customers from accessing their funds or signing up. Although new registrations for Mali are halted, Ziidi operates normally, raising concerns about the potential phasing out of Mali.
Both funds are currently visible on Safaricom’s M-PESA app. Efforts to obtain comments from Safaricom and Genghis Capital have been met with silence. By September 2024, Mali had become Kenya’s 17th largest collective investment scheme, managing KES 3.1 billion ($24 million) in assets and generating KES 11.6 million ($89,000) for Safaricom in the first half of that year.
Kenya’s investment funds have experienced considerable growth, with assets under management increasing by 13% to KES 254 billion ($1.9 billion) in June, compared to KES 225 billion ($1.7 billion) in March. During this timeframe, money market funds have proven to be the preferred investment choice, comprising KES 171.2 billion ($1.3 billion) and 67.4% of total investments, while remaining types of investments encompass fixed-income, equity, and various other categories.
In summary, Safaricom’s initiative to launch Ziidi has overshadowed the uncertain fate of the Mali money market fund. The transition has led to legal challenges and customer dissatisfaction amid allegations against Safaricom. As the investment landscape in Kenya grows, particularly in money market funds, the future of Mali remains ambiguous, raising concerns about customer trust and acceptable practices in the financial sector.
Original Source: techcabal.com
