Safaricom’s Ziidi Money Market Fund has reached a significant milestone, with assets under management hitting KSh 10.68 billion and reporting a robust half-year investment income of KSh 354.36 million for the period ending June 30, 2025. This achievement comes amid a broader transformation in Kenya’s money market fund landscape, as declining Treasury bill rates continue to pressure sector-wide returns.
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Strong Financial Performance Despite Market Headwinds
The unaudited financial results reveal a well-diversified income strategy that has helped the fund navigate challenging market conditions. Interest income from fixed deposits led the way at KSh 194.31 million, followed by KSh 86.34 million from government securities and KSh 73.34 million from call deposits. Corporate bonds contributed an additional KSh 7.96 million to the fund’s total investment income.
After accounting for operating expenses of KSh 81.28 million—including management fees of KSh 77.91 million, trustee fees of KSh 2.22 million, and custody fees of KSh 2.75 million—the fund posted a surplus of KSh 273.08 million attributable to unit holders. Total unitholder balances reached KSh 10.59 billion, reflecting strong investor confidence and growing participation.
Digital Innovation Driving Financial Inclusion
Ziidi’s success story is deeply intertwined with Safaricom’s M-PESA ecosystem, which contributed KSh 161.1 billion or 44.2% of the company’s Kenyan service revenue in FY2025. The mobile money platform’s expansion beyond simple transfers into wealth management products like Ziidi represents a strategic evolution that has resonated with Kenya’s digitally-savvy population.
Launched in December 2024 in partnership with Standard Investment Bank and ALA Capital Limited, Ziidi allows M-PESA customers to invest from as low as KSh 100 and earn competitive daily interest. The fund has attracted over 450,000 opt-ins since its public launch, demonstrating the appetite for accessible investment products among Kenyan consumers.
Market Context and Competitive Landscape
Kenya’s money market fund sector has experienced significant volatility in 2025, with Treasury bill rates declining from peaks of 16% in July 2024 to around 8-9% by August 2025. This dramatic shift has pressured returns across the sector, as financial advisor Alfred Methu explained, noting that T-bills are “the most predominant asset for MMFs, meaning any decline in their rates directly reduces MMF returns.”
Despite these headwinds, 19 money market funds in Kenya still declared average returns above 10% as of August 2025. The sector’s average yield stood at 10.47% (8.90% after tax) as of August 5, 2025, more than double Kenya’s inflation rate of 4.1%.
Strategic Partnership and Fund Management
Capital Markets Authority approval came in November 2024, enabling Safaricom to establish Ziidi as a collective investment scheme. The strategic partnership with multiple fund managers—Standard Investment Bank, ALA Capital Limited, and Sanlam Investments East Africa Limited—ensures professional management and regulatory compliance.
“We are excited to partner with Safaricom as a fund manager for Ziidi Fund. Our commitment to investors is that we will strive to offer them exceptional profits to help them achieve their financial goals,” said James Wangunyu, Standard Investment Bank’s Founder & Managing Director.
Technology-Enabled Investment Experience
Ziidi’s integration with the M-PESA platform represents a paradigm shift in how Kenyans access investment products. Customers can opt-in through the M-PESA App or by dialing 3345#, with immediate access to investment opportunities. The fund offers real-time tracking of daily earnings, transparent fee structures, and instant fund access—addressing traditional barriers that have kept many Kenyans away from formal investment products.
The platform’s user-friendly features include fund locking capabilities for disciplined saving, though locked funds don’t earn additional interest. There’s no fixed period for locking funds, and customers can top up their locked funds anytime, with unlocked funds becoming available within 72 hours.
Broader M-PESA Ecosystem Growth
Ziidi’s success is part of Safaricom’s broader financial services expansion. M-PESA celebrated its 18th anniversary in March 2025, having evolved from a simple money transfer service into a comprehensive financial ecosystem. The platform now processes over 37.2 billion transactions annually, with a total value of KSh 38.3 trillion.
Financial services revenue—including credit, wealth, and insurance products—grew 5.2% year-over-year for Safaricom, demonstrating the company’s successful diversification beyond traditional telecommunications services. Business payments through Lipa na M-PESA and Pochi la Biashara showed particularly strong growth, with the merchant base reaching 1.8 million and representing 44.2% year-over-year growth.
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Regulatory Framework and Investor Protection
The Capital Markets Authority regulates Ziidi MMF as a collective investment scheme, ensuring investor protection and market integrity. The fund operates under strict guidelines regarding asset allocation, with investments primarily in government securities, fixed deposits, and high-grade corporate bonds.
Interest earnings are subject to Kenya’s 15% withholding tax, similar to other investment products. The fund carries a 2% annual management fee, though the returns displayed to investors are net of this charge. All transactions between M-PESA wallets and the Ziidi fund are completely free, eliminating additional barriers to investment.
Market Dynamics and Future Outlook
The broader money market fund industry in Kenya has seen total assets under management rise 13% to KSh 254 billion in June 2025, up from KSh 225 billion in March, according to Capital Markets Authority data. This growth occurs despite the challenging interest rate environment, suggesting robust underlying demand for these investment products.
Economic factors driving change include Kenya’s inflation rate falling from a peak of 9.2% in March 2023 to 3.5% by February 2025, while the Central Bank of Kenya has correspondingly adjusted its monetary policy stance. These macroeconomic shifts have created both challenges and opportunities for fund managers.
Competitive Response and Mali Fund Transition
Ziidi’s launch has been accompanied by controversy regarding Safaricom’s older Mali fund, which was managed by Genghis Capital. Mali experienced technical issues in late 2024 and early 2025, preventing some customers from withdrawing funds or signing up for new accounts. By September 2024, Mali was Kenya’s 17th-largest collective investment scheme managing KSh 3.1 billion in assets.
The transition from Mali to Ziidi reflects Safaricom’s strategic decision to consolidate its money market fund offerings under a new management structure, though the company has remained tight-lipped about Mali’s ultimate fate.
Investment Accessibility and Financial Inclusion
Ziidi’s low minimum investment threshold of KSh 100 positions it as one of the most accessible investment products in Kenya’s market. This compares favorably with traditional money market funds that often require minimum investments ranging from KSh 1,000 to KSh 100,000. The daily transaction limits align with M-PESA’s existing framework of KSh 500,000 per day and KSh 250,000 per transaction.
The fund’s integration with M-PESA’s 30 million active users provides unprecedented reach for investment services. As CEO Peter Ndegwa noted, “Ziidi MMF is part of our continued efforts to diversify M-PESA beyond payments and deepen financial wellness.”
Risk Management and Portfolio Diversification
Ziidi’s asset allocation strategy reflects prudent risk management principles. As of June 30, 2025, non-current assets—including fixed deposits, government securities, and corporate bonds—totaled KSh 5.19 billion, while current assets including call deposits and cash balances reached KSh 5.50 billion. This balanced approach provides both stability and liquidity for investors.
The fund’s performance demonstrates resilience in a challenging rate environment, with diversified income sources helping to maintain competitive returns. Fixed deposits contributed the largest share of income at 54.8%, followed by government securities at 24.4% and call deposits at 20.7%.
Future Expansion and Product Development
Safaricom has indicated plans for further innovation within the Ziidi ecosystem. The company is working on Shariah-compliant options that will be unveiled soon, expanding access to investors seeking Islamic finance-compliant products. Additionally, future iterations may include options for chamas (investment groups) and businesses, though current approvals limit the fund to individual investors.
Conclusion: Digital Finance Evolution
Ziidi’s achievement of KSh 10 billion in assets under management represents more than just a successful product launch—it symbolizes the evolution of Kenya’s financial services landscape. By leveraging the ubiquity and trust of the M-PESA platform, Safaricom has created an investment product that bridges the gap between traditional banking and modern digital finance.
As Treasury bill rates stabilize and the broader money market fund industry adapts to new economic realities, Ziidi’s integrated approach and strong initial performance position it well for continued growth. The fund’s success demonstrates that when technology, regulatory support, and market demand align, financial inclusion can advance significantly.
For Kenya’s broader financial sector, Ziidi’s trajectory offers insights into the future of investment products in emerging markets. The combination of mobile technology, low barriers to entry, and professional fund management creates a template that could be replicated across other African markets, furthering the continent’s financial inclusion agenda.
The fund’s performance in the coming quarters will be closely watched as a bellwether for both Safaricom’s financial services strategy and Kenya’s evolving investment landscape in an environment of normalized interest rates and economic stability.
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By: Montel Kamau
Serrari Financial Analyst
24th September, 2025
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