Fund Ratings Plan: CMA Weighs Independent Risk Scores for Kenya's Money Market FundsFund Ratings Plan: CMA Weighs Independent Risk Scores for Kenya's Money Market Funds

The CMA is still working on the proposals and has announced no final rules, chief executive Wycliffe Shamiah said, according to a report by Techweez. He named Nigeria as the model, where every money market fund must be rated, although Kenya is leaning towards a voluntary regime.

Two ratings, two questions

The authority has outlined two ratings. A fund rating would assess the portfolio, including asset quality, default risk, return volatility, foreign currency exposure and liquidity. A manager rating would assess the company, including its systems, its people and the track record of its senior management.

The CMA says neither rating removes investment risk or guarantees profit. Shamiah said the regulator gets daily enquiries from investors asking whether funds are good or safe, and he framed the choice as independent review of disclosures or continuing as usual.

The Fund Managers Association welcomed the direction. Its chief executive, Fred Mburu, said ratings would complement managers' own due diligence rather than replace it, and could add credibility. The CMA has also cautioned some managers for marketing unrealistic returns.

A fast-growing industry

The stakes have risen as collective schemes have grown. At June 2026 the industry managed KSh 948.70B ($7.31B) for 4.14 million investors, spread across 66 approved schemes offering 320 funds. Assets are expected to pass KSh 1T ($7.70B) before the end of 2026.

When the CMA began tracking unit trusts in March 2018 they held KSh 56.60B ($0.44B), and investors numbered 171,904 in March 2021. Money market funds are the most popular product. Mwenendo earlier reported on how Safaricom opened a Shari'ah fund on M-PESA from KSh 100 ($0.77), part of the push that has drawn small savers into the sector.

What a rating would and would not tell a saver

Money market funds buy short-term paper such as Treasury bills, so their yields follow the auctions explained in Mwenendo's guide to how Treasury auctions set borrowing costs. A portfolio rating would show how much of a fund sits in higher-risk assets, while a manager rating would speak to how well the firm is run. Neither is a promise on returns.

As Mwenendo earlier reported, investors bid KSh 68.50B ($0.53B) for KSh 28B ($0.22B) of Treasury bills on offer, showing how much cash is chasing short-term paper.

Mwenendo's reading is that a voluntary regime would depend on how many managers choose to be rated, and savers could ask any fund whether it has a rating. The reports seen by Mwenendo give no consultation deadline, so the timetable for any rule remains open.