As Kenya faces rising interest rates and moderate inflation, money market funds (MMFs) are emerging as the preferred investment option for individuals seeking stability and competitive returns.
In August 2025, the Central Bank of Kenya raised its policy rate by 75 basis points, bringing the benchmark rate to 13.5%.
This move, aimed at curbing inflation, has directly boosted short-term returns and driven increased interest in MMFs.
The Kenya National Bureau of Statistics reported a 12% rise in individual investments in July 2025, while the Nairobi Securities Exchange recorded a 20% surge in MMF transactions year-to-date.
The Capital Markets Authority (CMA) recently released updated yield data for September 2025, highlighting the top-performing funds.
GulfCap MMF led the sector with a 13.1% return, followed closely by Nabo Africa MMF at 12.6% and Lofty-Corban MMF at 12.4%. Analysts note that these double-digit yields, while attractive, may reflect higher-risk strategies.
Mid-tier funds such as Old Mutual MMF and Madison MMF, yielding 10.7%, provide a balance of risk and reward, appealing to investors seeking steady growth.
Lower-yield funds below 9%, including Co-op MMF and ICEA LION MMF, cater to conservative investors prioritising capital preservation over higher returns.
CIC MMF, despite offering a lower yield of 8.4%, remains the largest fund in the market with assets totalling KSh 68.4 billion as of December 2024.
Tax incentives introduced in the 2025/26 budget have further enhanced the appeal of MMFs, while analysts forecast a 15% growth in East Africa’s MMF assets by 2026.
“The surge in MMF activity signals rising investor confidence,” said market observers.
“However, yields remain sensitive to monetary policy shifts, and investors must carefully assess their risk appetite.”
With economic uncertainties and inflationary pressures shaping investment decisions, MMFs are increasingly viewed as a safe haven that offers both liquidity and attractive returns. As Kenya’s financial landscape evolves, money market funds appear set to remain at the forefront of retail and institutional investment strategies.
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