Safaricom’s Ziidi Launch Raises Questions About Mali Money Market Fund
Safaricom has not disclosed the fate of its original money market fund, Mali, while it focuses on the launch of Ziidi, which has garnered over one million users. The transition has led to legal disputes and technical issues with Mali, amidst a backdrop of significant growth in Kenya’s investment funds sector.
Safaricom, Kenya’s largest telecommunications company, has not commented on the status of its original money market fund, Mali, launched in 2020, as it aggressively promotes its new offering, Ziidi. Ziidi, approved for regulatory launch in November 2024, is a collaboration among Safaricom, Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited. However, the introduction of Ziidi has generated controversy, with customers uncertain about the future of Mali while Safaricom focuses on attracting users to its new fund.
During an event marking M-PESA’s 18th anniversary, Safaricom announced that Ziidi has secured over one million registrations and amassed funds totaling more than KES 6 billion (approximately $46 million). Concerns arose as some customers allegedly transitioned from Mali, leading to a legal conflict with Mali’s fund management firm, Genghis Capital, which accused Safaricom of migrating customers without their consent.
In a December 2024 allegation, Genghis Capital claimed that Safaricom had induced a liquidity crisis in Mali, prompting mass withdrawals amidst ongoing disputes regarding the fund’s ownership. Compounding issues, late December 2024 and January 2025 saw Mali plagued by technical failures, hindering customer withdrawals and new registrations. Despite Mali’s current service freeze, Ziidi operates smoothly, fueling doubts about the future viability of Mali.
Both Mali and Ziidi funds are accessible through Safaricom’s M-PESA app. Despite repeated attempts to obtain comments from Safaricom and Genghis Capital, neither party has responded. As of September 2024, Mali was recorded as Kenya’s 17th-largest collective investment scheme, managing assets totaling KES 3.1 billion (approximately $24 million) and generating KES 11.6 million ($89,000) for Safaricom during the first half of that year.
Investment funds in Kenya have enjoyed remarkable growth, with total assets under management increasing by 13% to KES 254 billion ($1.9 billion) as of June, compared to KES 225 billion ($1.7 billion) in March, according to the Capital Markets Authority (CMA). Money market funds dominate this market, holding KES 171.2 billion ($1.3 billion) and constituting 67.4% of all investment assets, while the rest of the assets are allocated to fixed-income, equity, and other categories.
In summary, Safaricom remains silent on the status of its Mali money market fund while actively promoting its new fund, Ziidi. The transition has sparked disputes and uncertainties among customers, particularly regarding customer migration and technical failures with Mali. Overall, investment funds in Kenya are growing significantly, with money market funds leading in popularity.
Original Source: techcabal.com
