KENYA · MARKETS · SAVINGS
Key Facts
- —What happened The average return of 26 Kenyan money market funds, after fees, fell to 9.3% as of 15 October 2026, from 9.9% a year earlier.
- —Why The funds hold Treasury bills and bank deposits, and the one-year bill cleared at 9.04% at the auction of 15 October, with the central bank rate held at 8.75%.
- —The spread Across 34 funds listed on 16 October, annual yields ranged from 11.0% at the top to 4.2% at the bottom.
- —The size Kenyan unit trusts managed KSh948.7 billion (about US$7.36 billion) at the end of June 2026, up 11% in three months.
- —The shift Money market funds fell below half of unit trust assets in the quarter to June, while riskier special funds grew fastest.
- —What it means for you The shilling lost only about 0.5% against the dollar in a year, so falling yields, not the currency, are what shrink returns for dollar-based savers.
Kenya’s money market funds, the low-risk savings pools at the heart of the country’s fast-growing unit trust industry, now pay less than a year ago. Their average return after fees fell to 9.3% as of 15 October from 9.9% a year earlier, according to a tally of 26 funds by Business Daily, the Nairobi business newspaper.
The drop follows lower yields on one-year Treasury bills and on bank deposits, where the average rate slipped to 6.91% in August from 7.13% in December, according to the Central Bank of Kenya. For US readers it is a gauge of how cheaply Kenya’s government can now borrow at home, and of why local savers are moving into riskier funds that promise more.
What the Numbers Show
Of the 26 funds in the newspaper’s tally, 20 posted a lower annual return than a year ago and six posted a higher one. The six were the African Alliance Kenya, Faulu, Genghis, KCB, Madison and SanlamAllianz funds, and the number of funds paying double digits slipped to 13 from 14.
A weekly table from Cytonn, a Nairobi investment manager whose own fund tops the list, shows yields for 34 funds as published on 16 October and credits Business Daily as its source. Their simple average comes to about 9.2% by The Rio Times’ calculation, close to the newspaper’s figure.
The gap between funds is wide. Cytonn’s fund led at 11.0%, followed by Faulu at 10.8% and Lofty-Corban at 10.6%, while the Ziidi, Stanbic and Equity funds paid 6.2%, 5.3% and 4.2%.
The average of the top five funds in Cytonn’s table fell to 10.7% from 10.8% a week earlier. Cytonn put that top-five average at 12.5% at the end of September 2025, which shows how far the best returns have come down.
Why Returns Are Falling
Money market funds invest mainly in short-term government paper and bank deposits, so their returns follow those rates with a lag. At the Central Bank of Kenya’s Treasury bill auction of 15 October, the 91-day bill cleared at 8.75%, the 182-day bill at 8.86% and the 364-day bill at 9.04%.
Those rates barely moved from the previous week, and the 91-day bill drew bids worth more than six times the amount offered. A year earlier the one-year bill cleared at 9.39% but the 91-day bill paid only 7.89%, according to the central bank’s results, so the fall is in longer-dated bills rather than across the board.
The central bank, which sets Kenya’s benchmark interest rate, kept that rate at 8.75% at its Monetary Policy Committee meeting on 7 October. With bills yielding close to the policy rate, fund managers have little room to pay much more without taking extra risk.
Where the Money Is Going
Kenyan collective investment schemes, the unit trusts that include money market funds, managed KSh851.7 billion (about US$6.61 billion) at the end of March 2026, according to the Capital Markets Authority, the securities regulator. That was 13% more than the KSh756.3 billion (about US$5.87 billion) reported at the end of December 2025.
The regulator’s quarterly report on these schemes put total assets at KSh948.7 billion (about US$7.36 billion) at the end of June. Money market funds held KSh459.9 billion (about US$3.57 billion), or 48.5% of the total, down from 51.9% in March.
Special funds, which can hold unlisted shares, offshore stocks and other higher-risk assets, raised their share to 26.6% from 23.9%, according to the same report. Their assets grew 24% in the quarter, against 4% for money market funds.
“The growth of special funds vis-à-vis MMFs is purely driven by investors chasing returns,” Linus Kang’ara, chief executive of Capital A Investment Bank, told Business Daily. He added that “Kenyans are synonymous with chasing higher yields.”
What It Means for US Readers
The shilling has barely moved, which makes the yield itself the story for anyone thinking in dollars. The rate was 128.2 shillings per US dollar a year ago and 128.84 at Friday’s close, a fall of about 0.5% for the shilling.
On those numbers, a 9.3% shilling return is worth roughly 8.8% in dollar terms before taxes and transfer costs. Lower local yields also signal cheaper domestic borrowing for Kenya’s government, which matters to US holders of Kenyan dollar bonds watching how it funds its budget.
What Is Not Known
The newspaper has not published the full list of 26 funds or its method, and the Cytonn table uses effective annual rates that may treat fees differently. The two averages are close, but they are not the same measure.
It is also not known how fast rates will fall from here, or whether savers moving into special funds understand the extra risk. The regulator has not yet published its figures for the quarter to September.
What Comes Next
The central bank holds its next Treasury bill auction on Thursday, 22 October, which will show whether short-term rates keep drifting lower. Fund returns usually follow those rates with a delay of weeks rather than days.
Frequently Asked Questions
What is a money market fund in Kenya?
It is a unit trust that pools savers’ money and invests it in low-risk assets such as Treasury bills and bank deposits. Kenyan funds are licensed and supervised by the Capital Markets Authority.
How much do Kenyan money market funds pay now?
The average after fees was 9.3% as of 15 October 2026, down from 9.9% a year earlier. Individual funds ranged from about 11.0% to 4.2% in a table published on 16 October.
Why are Kenyan money market fund returns falling?
Yields on one-year Treasury bills and on bank deposits, two of the funds’ main assets, have come down. The one-year bill cleared at 9.04% on 15 October, with the central bank rate at 8.75%.
What are special funds?
They are unit trusts that can invest in higher-risk assets such as unlisted shares and offshore stocks. Their share of Kenyan unit trust assets rose to 26.6% in the quarter to June 2026.
Sources: Central Bank of Kenya, Treasury bill auction results, issues dated 19 October 2026 (signed 15 October), Central Bank of Kenya, MPC retains the CBR at 8.75 percent, 7 October 2026, Capital Markets Authority, Quarterly Statistical Bulletin Q2 2026 (data to March 2026), Capital Markets Authority, Collective Investment Schemes Quarterly Report, period ended 30 June 2026, Central Bank of Kenya, commercial banks’ weighted average rates, Central Bank of Kenya, Treasury bill auction results, issues dated 13 October 2025, Cytonn research: Cytonn Weekly #41 of 18 October 2026 (money market fund yields as published on 16 October), Q2 2026 Unit Trust Funds Performance Review (citing the CMA Quarterly CIS Report) and Q3 2026 Markets Review, Business Daily, Average returns on MMFs slump to 9.3pc, 18 October 2026. Exchange rate: Friday 16 October 2026 close, 128.84 shillings per US dollar; a year earlier, 16 October 2025, 128.2. All retrieved 19 October 2026.
Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error