Safaricom has unveiled a new unit trust, Ziidi Money Market Fund, following a protracted ownership dispute over its Mali fund, forcing the telecommunications giant to part ways with Genghis Capital and collaborate with new fund managers.
The Capital Markets Authority (CMA) confirmed its approval of the Ziidi fund, which will be managed by Standard Investment Bank (SIB), ALA Capital Limited, and Sanlam Investments East Africa Limited.
The decision to establish Ziidi follows months of tension between Safaricom and Genghis Capital over control of the Mali fund. While Genghis Capital claimed ownership of the product, citing its introduction of Mali through the CMA’s regulatory sandbox, SIB registered the Mali trademark with the Kenya Industrial Property Institute (KIPI).
“The wrangling over Mali led to the creation of Ziidi, with SIB now leading the new fund in partnership with Safaricom,” a CMA official disclosed anonymously. “SIB claimed the trademark, while Genghis maintained they owned the product itself.”
Despite the dispute, Mali remains a licensed collective investment scheme under CMA regulations, with both Safaricom and Genghis expected to decide the fund’s future.
Safaricom initially partnered with Genghis Capital in 2019 to pilot Mali as an M-Pesa-linked collective investment scheme aimed at transforming mobile money users into wealth investors. Since then, Mali’s assets under management have grown to Sh3 billion as of September 2024, placing it among the top 20 collective investment schemes in Kenya.
Mali’s portfolio primarily includes fixed bank deposits worth Sh1.5 billion, government securities valued at Sh595.9 million, and Sh524.3 million held in cash and demand deposits.
Despite its growth, Mali is yet to launch publicly, pending final regulatory approval from the Central Bank of Kenya (CBK). Safaricom reported revenues of Sh11.6 million from the fund in the first half of 2024, up from Sh6.2 million during the same period last year, driven by reinvestments from existing unit holders.
Ziidi aims to replicate Mali’s model by targeting low-income savers, with a minimum investment of Sh100. Subscribers will invest through M-Pesa, with returns generated from dividends and capital growth.
Safaricom’s Chief Finance Officer, Dilip Pal, expressed optimism about the company’s expanding financial services portfolio:
“At Sh3 billion, Mali is already among the top collective investment schemes by assets under management. We are now expanding and will announce further developments soon,” Pal said during a recent interview.
The move into wealth management aligns with Safaricom’s broader strategy to grow M-Pesa beyond mobile money transfers, integrating investment, insurance, and wealth-building services.
Ziidi’s launch date remains undisclosed, but it is expected to provide Safaricom with a fresh opportunity to tap into Kenya’s growing demand for money market funds, a popular investment option offering low-risk, short-term returns.
Both Safaricom and Genghis Capital have remained tight-lipped on the revenue-sharing model of Mali, while stakeholders await further clarity on the future of the original fund.