Kenya's KSh 460B Money Market War: Size Does Not Buy Yield as Special Funds SurgeKenya's KSh 460B Money Market War: Size Does Not Buy Yield as Special Funds Surge

The pool matters because it has become the default savings account for millions of Kenyans, with 4,146,196 investors across all collective schemes in June. Mwenendo's reading is that this market is being won on distribution and brand rather than on yield, and that its sharpest challenger is not another money market fund but the special funds growing beside it. Dollar figures here use KSh 129.80 to the dollar, close to the rate in Mwenendo's recent fund coverage.

A KSh 459.87B pool where two funds hold 43.2%

The regulator counts 59 money market funds. Together they grew 4% in the June quarter from KSh 442.22B ($3.41B), but their slice of all collective scheme assets fell from 51.9% to 48.5% as other products grew faster.

Concentration is heavy. SanlamAllianz alone holds KSh 127.83B ($0.98B), or 27.8% of the pool, and CIC holds KSh 71.04B ($0.55B), or 15.4%. Old Mutual (6.3%), Absa (5.6%), KCB (4.8%), Co-op (4.8%), ICEA Lion (4.5%) and Safaricom's Ziidi (4.3%) complete the top eight, which together hold 73.5%. The other 51 funds share the remaining 26.5%.

Momentum differs sharply. Between March and June SanlamAllianz grew 3.62%, while CIC shrank 5.36%, from KSh 75.06B ($0.58B) to KSh 71.04B ($0.55B). KCB grew 14.38% and Ziidi 9.16%, on Mwenendo's calculation from the regulator's March and June tables. The leaders are not losing share quickly, but the order beneath them is shifting.

Size does not buy yield

Money market funds sell themselves on one number, the yield. The comparison below pairs the regulator's June share of assets with the gross effective annual yield in a 5 October table compiled by PesaCalc. Gross here means after fund fees but before the 15% withholding tax, which is deducted at source.

Five of the eight largest funds, CIC, Co-op, ICEA Lion, Absa and Ziidi, quote yields below the 9.03% average on one-year Treasury bills, according to the Central Bank of Kenya's bills page. Together they hold KSh 159.29B ($1.23B), or 34.64% of the pool.

Weighting the 14 largest funds Mwenendo could match by their assets gives an average of 9.12%, no better than the 9.16% simple average of the 32 funds in the table. On this evidence, size has not been rewarded with a higher yield, and savers pay no obvious penalty for leaving the giants.

The limits are real. Yields move weekly, the Treasury bill rate and the fund table are not from the same day, and the table comes from an aggregator rather than the managers. The trend is clearer: TechTrendsKE found the average money market return at 9.3% after fees on 15 October, down from 9.9% a year earlier, with 13 funds in double digits against 14.

What KSh 100,000 earns, and what fees take

A saver who put KSh 100,000 ($770.42) into Cytonn at 11.0% would earn KSh 11,000 ($84.75) over a year before tax, or KSh 9,350 ($72.04) after it. The same sum in Ziidi at 7.0% earns KSh 7,000 ($53.93) before tax and KSh 5,950 ($45.84) after. The gap is KSh 3,400 ($26.19) a year, assuming the yields hold.

Fees sit inside those yields, not on top. Etica, Jubilee, Madison and Kuza list a 2.00% management fee, according to Yield.co.ke, and Jubilee's total expense ratio was 2.62% including VAT for September. PesaCalc puts typical fees at 1.5% to 2% a year.

On that range, and as an illustration only, a pool of KSh 459.87B generates roughly KSh 6.90B ($53.14M) to KSh 9.20B ($70.86M) a year in fees. That ignores dollar funds, VAT and any tiered charges, but it shows why managers fight for assets.

Entry price is the other lever. Etica, Ziidi and Mali accept KSh 100 ($0.77), while Madison asks for KSh 5,000 ($38.52). Nabo cut a KSh 100,000 ($770.42) minimum earlier this year, and no yield table captures that kind of access.

Ziidi: the M-Pesa advantage and its price

Ziidi shows how far distribution can carry a fund. Safaricom launched it in January 2025 with Standard Investment Bank and ALA Capital among its fund managers, and it had 1.15 million customers by September 2025, according to Business Daily.

It now holds KSh 19.89B ($0.15B), the eighth-largest money market pool, with a KSh 100 minimum and no transaction charges.

Its quoted yield was 6.99% on 5 October, or 5.94% after tax. Against September's 6.8% inflation, which Mwenendo reported from the national statistics bureau, that is a small loss in buying power for a saver who only holds Ziidi. The industry average of 9.3% leaves about 7.9% after tax, or roughly 1.1 points above inflation, on the same simple comparison.

Safaricom has also added a Shari'ah version managed by GulfCap, which Mwenendo covered when Safaricom opened a Shari'ah fund on M-Pesa. Mwenendo's interpretation is that Ziidi competes on ease, not return: for a first-time saver the app is the product, and the yield is a secondary matter that few compare.

Special funds: the rival that is not a money market fund

The faster-growing competitor sits in a different box. Special funds grew 24% in the June quarter to KSh 252.77B ($1.95B), from KSh 203.54B ($1.57B), and lifted their share of all schemes from 23.9% to 26.6%. TechTrendsKE quotes Linus Kang'ara of Capital A Investment Bank attributing that growth to investors chasing returns.

The largest scheme in Kenya is now a special fund umbrella. The Standard Investment Trust Fund, home of Mansa-X, held KSh 188.62B ($1.45B), or 19.88% of all assets at June, passing the Sanlam scheme at KSh 171.38B ($1.32B), as reported by Kenyans.co.ke from the regulator's bulletin.

Mansa-X's shilling fund held KSh 132.18B ($1.02B), and its first-quarter fact sheet shows an average annual net return of 18.18% since January 2019 but only 4.74% for the quarter. It lists a KSh 250,000 minimum, a six-month lock-in, a 5% annual charge and a 10% performance charge.

The same sheet says it invests across currencies, commodities, derivatives and fixed income, and cites volatility that produced negative bond returns.

That is a different product from a fund that holds Treasury bills and bank deposits. The Capital Markets Authority warned special fund managers in July against promoting unusually high returns without clear disclosure of risk, according to Business Daily.

Quality is untestable because the evidence stops at yield

Quality is hard to judge because the public record has gaps. No source reviewed for this analysis publishes each fund's asset mix, its default history or how fast it pays out withdrawals, so a saver cannot tell whether a higher yield reflects better management or more risk.

That is the argument behind the regulator's plan for independent ratings. As Mwenendo reported, the Capital Markets Authority is weighing risk ratings of funds and managers, leaning towards a voluntary regime, and has said a rating would not guarantee returns. No draft rule is public.

Until then, the competition is one of marketing against arithmetic. The only independent check available is the Treasury bill auction, explained in Mwenendo's guide to how Treasury auctions set borrowing costs, with the Central Bank Rate held at 8.75% on 7 October.

What it means for savers and for fund houses

For savers, the practical comparison is net yield after 15% tax, set against inflation and the Treasury bill rate, then the minimum, the withdrawal speed and how the fund is run. A top-eight name is a reason for comfort on scale, not evidence of a better return. This is analysis, not investment advice.

For investors in the groups behind these funds, assets and fees follow brand and channel. The leaders hold their positions, but CIC's 5.36% fall and KCB's 14.38% rise show that share can move in a single quarter, and the special funds are pulling the growth. If ratings arrive, they may widen the gap between funds that publish their holdings and those that do not.

The data is not complete. The regulator's tables give assets but not yields, yields come from aggregators, and nobody publishes risk. Until that changes, Kenya's money market war will be settled by habit, and by whoever sits on the home screen of the phone.