Kenya’s Safaricom is silent on the future of its first money market fund, Mali, as it promotes its successor, Ziidi, which has gained over a million sign-ups. Allegations against Safaricom have surfaced regarding unauthorized customer migrations from Mali, leading to a legal dispute with Genghis Capital. In the investment sector, money market funds remain dominant, with overall growth in assets being reported.
Safaricom, Kenya’s largest telecommunications company, is refraining from commenting on the future of its initial money market fund, Mali, which was launched in 2020. This silence occurs amidst an aggressive promotion of Ziidi, Mali’s recently launched successor. Ziidi, a collaborative effort involving Safaricom, Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited, received approval in November 2024 but has not been without controversy.
Controversies arose as customers remained unaware of Mali’s status while Safaricom concentrated on acquiring users for Ziidi. In a media briefing celebrating M-PESA’s 18th anniversary, the company announced that Ziidi has achieved over one million registrations and amassed over KES 6 billion ($46 million) in funds. Some users were reportedly transferred from Mali, igniting a legal conflict with Mali’s fund manager, Genghis Capital.
Genghis Capital filed allegations against Safaricom in December 2024 for allegedly migrating customers to Ziidi without their consent. The firm accused Safaricom of creating an artificial liquidity crisis, which led to mass withdrawals amid ownership disputes concerning Mali. The situation deteriorated in late December 2024 and January 2025, as Mali faced technical failures hindering customers’ ability to withdraw funds or register. Though registration for Mali remains suspended, Ziidi operates normally, raising suspicions regarding the potential phasing out of Mali.
Both funds are still listed on Safaricom’s M-PESA app. Despite repeated efforts to obtain statements from Safaricom and Genghis Capital, there has been no response to inquiries. By September 2024, Mali ranked as Kenya’s 17th largest collective investment scheme, managing KES 3.1 billion ($24 million) in assets and contributing KES 11.6 million ($89,000) in revenue to Safaricom during the first half of that year.
Investment funds in Kenya have experienced notable growth, with total assets under management increasing by 13% to KES 254 billion ($1.9 billion) as of June, an increase from KES 225 billion ($1.7 billion) in March, as reported by the Capital Markets Authority (CMA). Notably, money market funds continue to be the most preferred investment option, comprising KES 171.2 billion ($1.3 billion), which accounts for 67.4% of total investments. The remainder is allocated to fixed-income securities, equities, and other category investments.
In summary, Safaricom’s reluctance to comment on Mali’s future amidst the launch of Ziidi has created uncertainty among customers. Legal disputes have emerged concerning customer migration and alleged liquidity issues, which further complicate Mali’s status. Despite these challenges, the investment landscape in Kenya shows resiliency, with significant growth in assets under management, particularly within the money market sector. The outcome of these developments could have implications for Safaricom’s investment strategy and customer relationships.
Original Source: techcabal.com
