Allegations of Anti-Competitive Behavior Shake Kenya’s Money Market Funds
Safaricom, Kenya’s telecommunications giant, is facing serious scrutiny over its money market product, Ziidi. A complaint filed with the Competition Authority of Kenya (CAK) accuses Safaricom of engaging in anti-competitive practices that give Ziidi an unfair edge over rival funds. The complaint, lodged by I.C. Law LLP on behalf of Cytonn CEO Edwin Dande, alleges that Safaricom is leveraging its dominant mobile money platform, M-PESA, to provide Safaricom’s Ziidi with zero-rated access to its infrastructure. This arrangement, the complaint argues, creates a restrictive trade practice that disadvantages other money market funds.
The Core Allegations
The May 26 letter claims that Safaricom is distorting competition by waiving transaction fees for Safaricom’s Ziidi users while rival funds charge between KES 10 and KES 60 for deposits and withdrawals. This pricing disparity, the letter argues, amounts to Safaricom applying dissimilar conditions to equivalent transactions, which violates Section 21 of the Competition Act.
“We submit that this arrangement constitutes a restrictive trade practice under section 21 of the Competition Act as it applies dissimilar conditions to equivalent transactions, limits market access for competing funds, and distorts competition in the retail investment market,” the letter.
The complainants further allege that Safaricom’s conduct constitutes a restrictive vertical agreement. By giving Safaricom’s Ziidi preferential terms, Safaricom and its partner fund managers—Standard Investment Bank, ALA Capital, and Sanlam Investments East Africa—gain an undue customer acquisition advantage.
“We respectfully request that the Competition Authority of Kenya investigate this conduct and take appropriate enforcement action, including the termination of the exclusive arrangement and imposition of necessary sanctions.”
The Market Impact
Kenya’s money market fund sector has experienced exponential growth, driven by increasing access to retail investors via mobile platforms. As of June 2024, money market funds accounted for 67.4% of total collective investments, with assets totaling KES 171.2 billion ($1.3 billion).
Ziidi, launched in November 2024, has rapidly become a key player in this sector, attracting over one million users and accumulating KES 6 billion ($46 million) in assets. However, the complainants argue that this success comes at the expense of fair competition and transparency.
Safaricom’s previous money market product, Mali, provides additional context to the current controversy. Mali, which debuted in 2020, was effectively frozen in early 2025. Allegations surfaced that Safaricom orchestrated Mali’s liquidity challenges to pave the way for Ziidi. Some Mali users were reportedly migrated to Ziidi without their consent, sparking a legal battle between Safaricom and Genghis Capital, Mali’s fund manager.
Call for Action
The complaint requests that CAK take immediate action to level the playing field. The proposed remedies include:
- Extending Zero-Rated Access: Safaricom should allow all competing money market funds to access M-PESA infrastructure without transaction costs.
- Restoring Parity: Alternatively, Safaricom should charge Ziidi users the same fees imposed on other funds.
Failure to address these issues, the complainants warn, will erode trust in Kenya’s digital finance ecosystem. They further warn this will stifle competition in the burgeoning money market sector.
Unresolved Questions
Safaricom is yet to clarify the status of Mali or respond to allegations of preferential treatment for Ziidi. Despite both products appearing on the M-PESA app, Mali is no longer accepting new users, and its future remains uncertain.
This silence has fueled concerns that Safaricom is prioritizing vertically integrated products like Ziidi to the detriment of fair market practices.
A Broader Context
The allegations against Safaricom highlight a larger issue: how dominant players in digital finance can influence competition. With M-PESA controlling over 91% of Kenya’s mobile money market, Safaricom’s actions have far-reaching implications for the financial sector.
By leveraging its infrastructure to favor Ziidi, Safaricom risks undermining the principles of a free market. Regulators now face the challenge of balancing innovation with the need for fair competition.
What Lies Ahead
The CAK’s response to these allegations will set a critical precedent for Kenya’s financial landscape. As digital platforms increasingly dominate investment products, ensuring fair access and competition will be crucial to maintaining investor confidence.
The outcome of this case will not only impact Safaricom and its competitors but also shape the future of Kenya’s rapidly evolving money market sector.
