In a country where mobile money disrupted banking, Kenya’s financial landscape continues to evolve rapidly.
As of mid-2025, Money Market Funds (MMFs) have emerged as a powerhouse for everyday savers, offering a bridge between traditional savings and more sophisticated investments.
With total assets under management (AUM) for Collective Investment Schemes, which are dominated by MMFs, surging to KES 596.3 billion by June 2025, up from KES 389.2 billion at the end of 2024, these funds are not just growing; they’re reshaping how Kenyans build wealth.
But what does this mean for financial inclusion?
The Basics: MMFs and Kenya’s Push for Financial Inclusion
Money Market Funds are low-risk investment vehicles that pool money from investors to buy short-term, high-quality securities like Treasury bills, commercial paper, and bank deposits.
They offer better returns than standard savings accounts, often 10-17% annually before taxes, while maintaining liquidity, allowing withdrawals anytime without penalties.
Kenya’s financial inclusion story is a global success tale, largely thanks to M-Pesa and mobile banking.
The World Bank’s Global Findex Database 2025 reports that global account ownership hit 79% in 2024, with mobile money driving gains in low- and middle-income countries like Kenya.
Locally, household savings participation stood at 68.1% in 2024, down slightly from 74% in 2021, but with a focus on emergencies (27.7%) and daily needs (35.9%).
Yet, formal investment options remain underutilised: only 3.1% of adults engaged with capital markets in 2024, up from 2.3% in 2021, and MMF usage remains at a modest 2.1% of adult participation.
The Kenya National Financial Inclusion Strategy (NFIS) 2025-2028 underscores MMFs’ role in addressing these gaps.
By promoting accessible, high-yield savings, MMFs target underserved groups, including women, youth, MSMEs, and rural dwellers aligning with pillars like deepening access and enhancing usage of quality financial services.
With Kenya’s GDP projected to grow 5.4% in 2025, fuelled by agriculture and services, MMFs are positioned to capitalise on economic resilience.
Explosive Growth: MMFs in 2025 by the Numbers
2025 has been a banner year for Kenya’s MMF sector, despite headwinds like declining yields. MMFs accounted for KES 372.8 billion in AUM by Q2 2025 comprising of 62.5% of the total CIS market reflecting robust investor confidence.
READ ALSO:What Withholding Tax Means for Your Daily and Monthly MMF Yields
This marks a significant leap from earlier years, driven by digital platforms, awareness campaigns, and attractive returns amid stabilising inflation.
Here’s a snapshot of top performers as of August 2025:
| Rank | Fund Name | Net Annual Return (%) | AUM (KES Billion) | Minimum Investment (KES) |
|---|---|---|---|---|
| 1 | Cytonn Money Market Fund | 17.4 | >1 | 1,000 |
| 2 | Gulfcap MMF | 16.3 | N/A | 5,000 |
| 3 | Ziidi MMF (Safaricom) | ~15 | 2.85 | 1,000 |
| 4 | Ndovu MMF | 14.5 | N/A | 1,000 |
| 5 | Kuza MMF | 13.1 | N/A | 1,000 |
Yields have trended downward from peaks above 16% in early 2025 to around 12-13% by September mirroring falling inflation and Central Bank Rate adjustments.
Still, this beats bank savings rates of 5-7%. Innovations like Safaricom’s Ziidi MMF, which hit KES 2.85 billion in AUM with 450,000 users in its first month, highlight tech’s role in scaling access.
Real Impact: How MMFs Are Empowering Kenyan Savers
For the average Kenyan saver, think of a Nairobi matatu driver or a Kisumu farmer. MMFs democratise investing. Low entry barriers (as little as KES 1,000) and seamless integration with M-PESA make them inclusive.
Digital payments have boosted mutual fund performance, with studies showing strategic adoption enhances returns and reach.
Key Benefits:
- Higher Yields and Security: Savers earn compounded daily interest, far outpacing informal options like chamas (savings groups). Regulated by the Capital Markets Authority (CMA), MMFs offer principal protection, appealing to risk-averse users.
- Liquidity and Convenience: Instant deposits/withdrawals via apps reduce the hassle of bank queues, vital for the 52.4 million Kenyans, many in informal sectors.
- Inclusion for All: Youth (18-35) lead adoption, but MMFs address gender and regional disparities where women’s capital market participation lags, yet funds like Ziidi target them via mobile. Overall, MMFs boost financial health (currently at 18.3% nationally) by encouraging formal savings over cash hoarding.
Challenges Ahead: Navigating Declines and Regulations
Not all smooth sailing, as yields dipped in H1 2025 due to economic stabilisation, squeezing margins for conservative savers.
Low awareness persists in rural areas, and while CMA oversees MMFs, broader regs like the Draft Central Bank of Kenya (Non-Deposit-Taking Credit Providers) Regulations 2025 focus on digital lending, indirectly supporting fintech ecosystems.
Fintech growth, with a 14.1% CAGR projected through 2028, promises solutions like AI-driven personalisation. But as one analysis notes, fintech hasn’t fully closed inclusion gaps for women and youth.
Looking Forward: A Brighter Savings Horizon
In 2025, MMFs aren’t just funds; they’re tools for empowerment, turning small deposits into financial security for millions.
As Kenya eyes 5.6% GDP growth in 2026, expect continued expansion, fuelled by tech and policy. For savers, the message is clear: start small, invest smart.
Whether via Cytonn or Ziidi, MMFs are proving that financial inclusion isn’t a buzzword; it’s a reality reshaping lives.
Ready to dive in? Check your favourite MMF app today. What’s your go-to savings strategy? Share in the comments!
Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, climate change, and digital finance at Africa Digest News.
Leave a Reply