The Fight Between Safaricom and Genghis Over Mali and Ziidi Explained

The battle between Safaricom and Genghis Capital over their respective money market funds (MMFs), Mali and Ziidi, has escalated, with new allegations, counterarguments, and a swirl of user confusion adding fuel to the fire. What seems to have started as a quiet corporate dispute now appears to carry significant implications for Kenya’s financial ecosystem, from regulatory oversight to political undertones.

A Tale of Two Funds

Safaricom’s Mali, managed by Genghis Capital, was a groundbreaking introduction to MMFs via M-Pesa. Its promise of wealth democratization, allowing users to invest as little as KES 100, quickly gained traction. However, delays in scaling Mali beyond its beta phase created an opening for Safaricom to introduce Ziidi, another MMF that mirrors Mali in interface, functionality, and features.

The emergence of Ziidi raised eyebrows, particularly among users already familiar with Mali. Questions quickly arose: why introduce a competing product instead of fixing and scaling Mali? The answer, it seems, lies in the details of the latest developments.

New Allegations: Genghis Accuses Safaricom

Migrated Users Without Consent

Genghis Capital, in a formal letter to Safaricom as seen from @MwangoCapital, made bold allegations, claiming that the telco had:

1. Migrated Users Without Consent: Reports from users on X (formerly Twitter) suggest they were automatically migrated from Mali to Ziidi without prior notice.
2. Restricted Dual Access: Other users reported receiving messages that they couldn’t access Ziidi because they were already on Mali—and vice versa.
3. Data Breach Concerns: Genghis argues that these migrations, without explicit customer consent, amount to a data breach under Kenya’s data protection laws.

The firm also accused Safaricom of prioritizing Ziidi over Mali, despite a commercial agreement that entrusted Genghis with Mali’s management.

Safaricom’s Defense

Safaricom has vehemently denied these claims, responding – also in a letter as seen from @MwangoCapital – with a detailed rebuttal that outlines its position:

1. No Unauthorized Migrations: Safaricom insists it has not migrated users between Mali and Ziidi. It maintains that both funds exist as separate products, with customers given the freedom to choose.
2. Technical Challenges with Mali: The telco reiterated its earlier stance that Mali’s platform has faced persistent technical instability, making it risky to onboard more customers without addressing these issues.
3. Ziidi as an Alternative: Safaricom argues that Ziidi was developed independently in partnership with Standard Investment Bank, ALA Capital, and Sanlam Investments, offering users an alternative MMF option.
4. No Data Breach: The company categorically denies allegations of data breaches, asserting that all customer data is handled in compliance with Kenya’s data protection regulations.

User Confusion: Mali vs. Ziidi

Migration Reports

Amid these corporate wranglings, users have been caught in a web of uncertainty:

• Migration Reports: Some users said they were shifted from Mali to Ziidi without prior notice, sparking concerns about transparency.
• Access Restrictions: Others have received conflicting messages, including being told that they cannot sign up for Ziidi because they are already on Mali, and vice versa.
• Identical Features: For those who can access both funds, the similarities between the two platforms — including interfaces, interest rates, and features like locked funds — raise questions about the need for dual offerings.

For users like me, who have accounts on both Mali and Ziidi, the experience has been quite something. While both funds earn interest – I’ve noticed different interest rates – the lack of clarity around their coexistence has left many wondering whether they’re competing products or part of a larger Safaricom strategy.

Political Undertones and the Moi Family Connection

The drama takes a political turn with revelations claiming Genghis Capital is linked to the Moi family. Reports from Business Daily suggest that concerns over the fund manager’s ownership influenced Safaricom’s decision to want to diversify its MMF offerings.

According to Business Daily, the association with the Moi family raised red flags among state officials, who viewed the reliance on Genghis for Mali as a potential risk. This backdrop likely played a role in Safaricom’s move to launch Ziidi, which involves partnerships with multiple fund managers, ostensibly to reduce concentration risk.

Implications for Kenya’s Financial Sector

Regulatory Concerns

The ongoing dispute has far-reaching consequences:

1. Regulatory Concerns: The allegations of unethical practices, data breaches, and restrictive measures highlight the need for stronger regulatory oversight of MMFs in Kenya.
2. User Trust: Conflicting messages and migration reports risk eroding user confidence in Safaricom’s financial products.
3. Political Influence: The Moi family’s involvement underscores how political considerations can shape corporate strategies in Kenya.

The Road Ahead

The Mali-Ziidi saga is far from over. With accusations flying and user trust hanging in the balance, the focus must now shift to transparency and resolution. Whether this dispute ends in reconciliation or further escalation, its outcome will likely shape the future of Kenya’s MMF ecosystem.

As a user of both Mali and Ziidi, I’ll continue monitoring their interest rates, features, and user experiences. For now, this high-stakes battle serves as a reminder that even in the digital age, corporate partnerships and user trust remain fragile.