An investment bank based in Kenya has raised concerns about Safaricom engaging in what it calls “business fraud” related to the launch of a competing money market fund called Ziidi. The bank claims that Safaricom delayed the launch of Mali, a fund that was developed in partnership with them back in 2020, in favor of introducing Ziidi, which received approval from Kenya’s Capital Markets Authority in November 2024.
In a letter dated December 3, 2024, the investment bank accused Safaricom of violating their agreement and described the actions taken by the telco as constituting “business fraud.” Safaricom responded on December 6, explaining that technical challenges with the Mali platform were the reason for the delay in its launch, highlighting potential risks associated with launching a fund with such issues.
Aside from the allegations of business fraud, the investment bank also claimed that Safaricom breached privacy laws by transferring customers from Mali to Ziidi through the M-Pesa app without their explicit consent, which would violate data protection regulations.
As of September 2024, Mali was ranked as the seventeenth-largest collective investment scheme in Kenya, with assets totaling $23.9 million (KES3.1 billion) and generating $89,748 (KES11.6 million) in revenue for Safaricom in the first half of 2024. This situation underscores the increasing competition in Kenya’s wealth management and digital finance sectors as Safaricom aims to diversify its investment offerings through M-Pesa.