In a clear sign of growing economic anxiety, Kenyans are overwhelmingly choosing caution over risk, channeling unprecedented billions into Money Market Funds (MMFs) as high inflation and market volatility rattle traditional investment avenues.

This strategic shift to low-risk, liquid assets underscores a fundamental concern among households and businesses: protecting their money in a tough economy is now more critical than chasing aggressive growth. The move highlights a collective search for stability in uncertain times.

A Record-Breaking Surge to Safety

According to the latest quarterly report from the Capital Markets Authority (CMA), the numbers are stark. Total assets held in Collective Investment Schemes (CIS) surged to a record KES 679.6 billion by the end of September 2025. MMFs alone command the lion's share of this wealth, expanding to KES 400 billion, which accounts for nearly 59% of all assets under management.

The CMA attributes this sustained appeal to investors' preference for stability in a challenging macroeconomic environment. This flight to safety is not a sudden whim but a growing trend; total assets in these schemes have skyrocketed over 1,100% from KES 56.6 billion in March 2018.

• Total Assets in MMFs: KES 400 billion as of Q3 2025.
• Market Dominance: MMFs represent 58.9% of the entire CIS market.
• Quarterly Growth: The total CIS market grew by 14% between June and September 2025 alone.

Why Cash is King

The appeal of MMFs lies in their design. They invest in low-risk, short-term instruments like government Treasury Bills and bank deposits, offering modest but reliable returns. With annual yields ranging between 12% and 16%, they offer a crucial hedge against inflation, which has eroded the value of savings left in traditional bank accounts that often yield only 2% to 4%.

Analysts note that this makes MMFs a pragmatic choice for emergency funds, short-term savings, or business cash-flow management. Their liquidity, allowing investors to withdraw funds within a day or two, provides a vital safety net when household and business budgets are squeezed.

A Tale of Two Markets

The surge into MMFs contrasts sharply with the subdued appetite for riskier assets. Equity and Balanced Funds, which invest in the stock market, remained marginal players, accounting for just 0.5% and 0.2% of assets under management, respectively. This reflects a deep-seated caution among retail investors amid elevated interest rates and inflation.

While the Nairobi Securities Exchange (NSE) has shown signs of a bull run in 2025, with some stocks delivering impressive returns, the broader investor base appears unconvinced, prioritizing the guaranteed preservation of their capital. The data suggests that for the average Kenyan, the perceived volatility of the stock market is a risk too great in the current climate.

Looking ahead, the dominance of MMFs signals a market bracing for continued uncertainty. Until macroeconomic pressures ease and confidence in long-term growth returns, the quiet, steady performance of these funds will likely remain the investment story for billions of Kenyan shillings.