Safaricom Remains Silent on Mali’s Future Amid Ziidi Launch

Safaricom is currently promoting Ziidi, its new money market fund, while remaining silent about the status of its previous fund, Mali. Allegations of customer migration and a lack of communication have sparked controversy and legal disputes. Despite these issues, Ziidi has garnered significant interest, with over one million sign-ups, while Mali’s performance continues to dwindle in the face of operational challenges.

Safaricom, Kenya’s largest telecommunications provider, has not disclosed any updates regarding Mali, its original money market fund launched in 2020, while it promotes its new product, Ziidi. Ziidi was granted regulatory approval in November 2024 and is a collaborative effort involving Safaricom, Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited. However, concerns have been raised over the transition from Mali to Ziidi, leaving customers unsure about Mali’s future as Safaricom aggressively works to onboard users to Ziidi.

During a media briefing held on M-PESA’s 18th anniversary, Safaricom announced that Ziidi has surpassed one million sign-ups, accumulating over KES 6 billion ($46 million) in assets. Controversy arose when it was reported that customers may have been transferred from Mali to Ziidi without their consent, leading to a legal dispute with Genghis Capital, the manager of Mali. Allegations surfaced in December 2024 that Safaricom engineered a liquidity crisis aimed at provoking mass withdrawals from the Mali fund in light of ongoing ownership disputes.

The situation has further deteriorated since late December 2024 and into January 2025, when Mali faced continual technical issues that hindered customers from accessing their funds or registering. While new registrations for Mali have been suspended, Ziidi remains operational, intensifying speculation that Safaricom is de-emphasizing Mali. Presently, both funds are accessible through Safaricom’s M-PESA application, but attempts to receive comments from Safaricom and Genghis Capital have gone unanswered.

By September 2024, Mali had evolved into Kenya’s 17th-largest collective investment fund, managing KES 3.1 billion ($24 million) in assets and generating KES 11.6 million ($89,000) in revenue for Safaricom during the first half of the year. Furthermore, as reported by the Capital Markets Authority (CMA), Kenya’s investment funds experienced notable expansion, where total assets reached KES 254 billion ($1.9 billion) in June, an increase from KES 225 billion ($1.7 billion) in March.

During this same timeframe, money market funds prominently led the investment landscape, encompassing KES 171.2 billion ($1.3 billion), which constituted 67.4% of total investments. The remaining assets were allocated among fixed-income investments, equity, and other categories, contributing to a diversified investment portfolio.

In conclusion, Safaricom is currently focusing its efforts on promoting its new money market fund, Ziidi, while providing no updates on the status of its predecessor, Mali. Allegations of customer migration from Mali to Ziidi without consent have led to legal disputes and ongoing technical difficulties affecting Mali. The financial landscape in Kenya continues to evolve, with a significant increase in total assets within investment funds, highlighting the ongoing popularity of money market funds among investors.

Original Source: techcabal.com