FOR many Kenyans living and working abroad, there is a constant question: how do you save and grow your money back home without constantly worrying about mismanagement, fraud or unnecessary risk?
The answer lies in regulated money market funds (MMFs). These investment vehicles are designed to provide steady, predictable returns while preserving access to your funds. They are licensed and monitored by the Capital Markets Authority (CMA), which enforces strict oversight and reporting standards.
Traditional savings accounts in Kenya pay very little interest—often well below the inflation rate. That means money parked in a regular bank account is slowly losing value in real terms. On the other hand, unregulated schemes, informal chamas, or private investment deals may promise high returns but often expose investors to high default risk and little accountability.
Money market funds provide a middle ground and have become popular on some solid grounds. Firstly, safety because they invest in secure, short‑term instruments such as Treasury bills, high‑grade corporate paper and bank deposits.
Secondly, professional management by licensed fund managers, rather than relying on individuals to pick investments. Thirdly, liquidity because withdrawals usually take only 24–48 hours. Finally, regulatory protection, since CMA oversight requires audited accounts, independent custodians and regular public reporting.
In recent years, the typical return for money market funds in Kenya has been around nine per cent to 11% per year. This makes them a practical tool for diaspora Kenyans who want their money to grow reliably without the stress of active involvement or the fear of losing capital to informal ventures.
Suppose you have Sh1,000,000 that you want to park in a low‑risk, flexible investment. If you place it in a money market fund yielding 10% per year, you would earn Sh100,000 in interest before tax. After deducting the 15 per cent withholding tax on investment income, your net return would be Sh85,000.
This is substantially better than a regular savings account, which might pay less than Sh20,000 for the same amount over a year.
If you keep reinvesting your earnings rather than withdrawing them, the compounding effect kicks in. After three years, your initial Sh1 million would grow to roughly Sh1.28 million. If you had Sh5 million to invest, the same rate would give you close to Sh6.4 million after three years—again, without any additional deposits.
Now consider the case of consistent savings. If you are abroad and able to send home $500 (around Sh65,000) every month into a money market fund earning 10% annually, after two years your total deposits would be about Sh1.56 million.
With the compounding interest added, the balance would be closer to Sh1.73 million, assuming rates stay constant. Over three years, you would have deposited Sh2.34 million, and your balance would grow to about Sh2.7 million—all without doing anything beyond setting up a regular transfer.
Many diaspora investors lose money by sending funds to relatives or friends to “hold” or “invest” on their behalf. Even when relatives are trustworthy, the money often ends up being used for emergencies, daily expenses or projects that never take off.
Money market funds remove this personal conflict because the investment is held in your own name, professionally managed and not easily diverted for unintended purposes.
In addition, the transparency and regulation of these funds make them less vulnerable to the types of fraud that occasionally affect unlicensed investment schemes. Your money is safeguarded by a licensed fund manager, an independent custodian bank and an independent trustee, creating three layers of oversight.
The main limitation is that returns are moderate. You won’t double your money in a year. But this stability is exactly what many diaspora savers need for short‑ and medium‑term goals—whether that’s building up a deposit to buy land, build a home, accumulating funds for a child’s school fees, or preparing seed capital for a business investment later on.
If you are a Kenyan living abroad and want a hands‑off investment that combines safety, reasonable growth and easy access, a regulated money market fund is hard to beat. This goes for anyone who wants to grow money steadily while avoiding the headaches of active management.
Amos is the Manager, Enwealth Capital Limited
