Safaricom is currently promoting its new fund, Ziidi, while remaining silent on the status of its previous Mali money market fund. The transition has been controversial, leading to legal disputes regarding customer migration and technical failures impacting Mali. As the investment sector in Kenya grows, the future of Mali appears uncertain.
Safaricom, Kenya’s leading telecommunications company, has not provided any updates regarding its Mali money market fund, which was launched in 2020. Instead, the company is focusing its efforts on promoting Ziidi, a newly introduced fund approved in November 2024. This transition has raised concerns; many customers are left uncertain about the future of Mali while Safaricom works to onboard users onto Ziidi, which is a collaborative venture involving Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited.
During a media briefing commemorating M-PESA’s 18th anniversary, Safaricom announced that Ziidi has achieved over one million sign-ups and amassed over KES 6 billion ($46 million) in funds. There are claims that certain customers were transferred from Mali to Ziidi without their consent, leading to legal disputes with Mali’s managing firm, Genghis Capital. In December 2024, Genghis Capital alleged that Safaricom was responsible for inciting a liquidity crisis to instigate mass withdrawals from Mali amid ownership disagreements.
The situation escalated in late December 2024 and January 2025, as Mali faced ongoing technical issues preventing users from withdrawing their investments or registering for the service. Current operations show that while conventional registrations for Mali are halted, Ziidi is functioning normally, fueling speculation that Mali may be phased out.
Both funds can still be accessed through Safaricom’s M-PESA app. Despite multiple requests for comments, Safaricom and Genghis Capital have not responded to inquiries regarding this situation. As of September 2024, Mali was the 17th largest collective investment scheme in Kenya, handling KES 3.1 billion ($24 million) in assets and generating KES 11.6 million ($89,000) in income for Safaricom in just the first half of the year.
The investment landscape in Kenya is expanding, with total assets under management rising 13% to KES 254 billion ($1.9 billion) as of June, compared to KES 225 billion ($1.7 billion) in March, based on Capital Markets Authority data. Notably, money market funds have proven to be the most favored investment vehicle, representing KES 171.2 billion ($1.3 billion) and 67.4% of total investments, while remaining assets are divided among fixed-income, equity, and other investment categories.
In summary, Safaricom remains silent regarding the Mali money market fund while actively promoting its new fund, Ziidi. Legal disputes have arisen over the alleged unauthorized transfer of Mali’s customers, leading to severe operational issues for Mali. As the Kenyan investment market continues to grow, the fate of these funds remains uncertain amidst rising customer dissatisfaction. The contrasting operational status of the two funds could indicate a strategic shift within Safaricom to favor Ziidi for future growth.
Original Source: techcabal.com
