Kenya: Genghis Capital Accuses Safaricom of Business Fraud Over Ziidi Money Market Fund
A dispute is brewing in Kenya as Genghis Capital, an investment bank, accuses Safaricom of engaging in “business fraud” regarding the launch of Ziidi, the telco’s newly introduced money market fund. The fallout between the two firms stems from the introduction of Ziidi in November 2024, which has sparked a heated controversy.
The conflict traces back to 2020 when Genghis partnered with Safaricom to launch Mali, a money market fund integrated into M-Pesa. However, Genghis now alleges that Safaricom deliberately delayed the rollout of Mali, only to secretly register and launch Ziidi in collaboration with other third parties. This move, according to Genghis, not only breached their prior agreement but also eroded the trust that had been established since their partnership began in 2019.
In a letter dated December 3, Genghis accused Safaricom of unethical practices, claiming that the telco prioritized developing Ziidi while neglecting Mali. Safaricom responded on December 6, citing “technical issues” with Mali that posed risks in scaling the product, potentially exposing both companies to regulatory and reputational challenges.
Furthermore, Genghis alleges that Safaricom violated privacy laws by transferring customers from Mali to Ziidi through the M-Pesa app without obtaining their consent. If substantiated, this could lead to serious repercussions for Safaricom for breaching data protection regulations.
Despite the allegations, Mali has not been a failure. By September 2024, it ranked as Kenya’s 17th-largest collective investment scheme, managing assets worth $23.9 million (KES 3.1 billion) and generating $89,748 (KES 11.6 million) in revenue for Safaricom in the first half of the year.
This clash highlights the intense competition in Kenya’s wealth management and digital finance sectors. Safaricom is clearly intent on expanding its investment services through M-Pesa, but the accusations and breakdown in trust could reshape how partnerships in the industry are structured and managed in the future.
