The Safaricom-backed money market fund (MMF) reached Sh3 billion in assets under management as of end-September 2024 from Sh1.3 billion a year earlier, the telco revealed in its half-year results.
Mali now ranks among the top collective investment schemes, although the fund was launched as a pilot project with a full license still pending.
The growth of the collective investment scheme, which still operates as a closed-end fund without new investors, is largely due to reinvestment by existing unitholders.
Safaricom generated revenue of Sh11.6 million from Mali during the six months, an improvement on Sh6.2 million the previous year.
Safaricom’s modest revenues, which represented about 0.36 percent of assets under management in the period, suggest a smaller cut for the telco in the MMF deal that left Cengiz Capital as the fund’s sole manager for the time being.
Neither Safaricom nor Genghis Capital revealed the revenue-sharing model for the Mali partnership. Safaricom is seeking a full licence, which would bring Mali to new investors.
A full license would see the telco partner with additional fund managers as administrators even as Mali’s assets under management grow further from new investors.
“At Sh3 billion, we are already at the top of the list for collective investment schemes in terms of assets under management. We are now expanding, and we will announce that soon,” said Dilip Pal, Safaricom’s CFO.
Mali MMF will be ranked as the 14th largest collective investment scheme in terms of asset base according to Capital Market Authority disclosures as of 30 June 2024.
Mali is widely expected to compete with major fund managers, including CIC, Sanlam, NCBA and Britam, by tapping into Safaricom’s client base of more than 33 million.
Mali, which is linked to Safaricom’s mobile money platform M-Pesa, has been running as a pilot since it was introduced to the market in 2019.
The Capital Markets Authority (CMA) has approved Mali as a collective investment scheme, but the fund is awaiting licensing from the Central Bank of Kenya (CBK) due to its connection to the M-Pesa ecosystem.
Mali is expected to benefit from Safaricom’s support and growing interest in money market funds among retail investors to consolidate its position as a top credit unit. Money market funds invest primarily in cash and near cash instruments including fixed deposits and treasury bills.