Safaricom’s recently launched Ziidi Money Market Fund (MMF) has come under regulatory and public scrutiny following accusations of anti-competitive behavior and potential data privacy violations, stemming from a fallout with its former investment partner, Genghis Capital.
Launched in late 2024 through the M-Pesa platform, Ziidi MMF was positioned as a seamless digital savings and investment product targeting mass-market retail investors. The fund, developed in collaboration with Sanlam Investments, ALA Capital, and Standard Investment Bank, was approved by the Capital Markets Authority (CMA) and quickly gained traction, reportedly amassing over KES 6 billion in assets under management (AUM) and more than 450,000 users within its first quarter.
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However, Safaricom’s rapid pivot from its earlier partnership with Genghis Capital on the Mali MMF has triggered controversy. Genghis has accused Safaricom of deliberately sidelining Mali, a fund that had gained regulatory approval in 2023 and grown to over KES 3.1 billion in AUM, in favor of the Ziidi rollout. The firm alleges that Safaricom breached contractual obligations and engaged in practices tantamount to business fraud, including the unauthorized migration of Mali subscribers to the Ziidi platform.
“It was a coordinated and deliberate switch,” a Genghis Capital executive told local media. “What was presented as a technical upgrade was actually a rerouting of users to a new product with a new partner, without proper disclosures or consent.”
Genghis further claims that Safaricom may have leveraged its dominance in the mobile money space to reallocate traffic and investor capital away from Mali, raising serious competition concerns.
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In response, Safaricom defended its actions, stating that Mali had suffered operational and compliance setbacks that threatened its long-term viability. The telecommunications giant maintained that the decision to transition to Ziidi was made in the best interests of customers, adding that the new platform offers enhanced features, including daily interest accrual, zero withdrawal fees, and real-time visibility via the M-Pesa app.
Nonetheless, the allegations have attracted increased attention from industry observers, legal analysts, and the CMA itself. Critics argue that, if substantiated, the case could set a precedent around market dominance abuse, digital consent protocols, and the handling of financial consumer data under Kenya’s Data Protection Act.
While Safaricom has not indicated any plans to pause the growth of Ziidi, legal experts note that the CMA may be compelled to launch a formal investigation, especially if complaints surrounding user data migration and product substitution persist.
Public sentiment has also been divided. On platforms like Reddit and X (formerly Twitter), some users have voiced concerns over Ziidi’s lower yields compared to Mali, with others pointing out a lack of transparency on fee structures. “Ziidi is giving red flags every day,” one user commented, while another noted, “Even the troubled Mali beats Ziidi by over 2%.”
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Despite the turbulence, Ziidi continues to attract users, bolstered by Safaricom’s vast mobile infrastructure and strategic marketing. But for industry stakeholders, the situation highlights a broader tension in Kenya’s evolving fintech space: how far incumbents can go to consolidate market share without crossing legal and ethical lines.
What to Watch:
- Regulatory developments: The CMA’s position on the dispute will be crucial in determining the fund’s compliance status.
- Potential legal action: Genghis Capital may seek damages or regulatory intervention.
- Impact on digital MMFs: The case could influence how future partnerships in fintech and investment are structured, especially regarding customer data rights.
As of now, both Mali and Ziidi remain operational, but the outcome of this dispute may significantly shape the future of digital investment products in East Africa.
