Money Market Funds Are Not Investments — CMA Should Classify Them As Saving Products

Kenya is standing at an economic crossroads, and the choice is painfully clear: either we fix our broken savings culture today, or we condemn generations to poverty, expensive debt, and endless financial fragility. For decades, policymakers have begged Kenyans to “save more,” yet the very system meant to help them save has been mislabeled, misunderstood, and mis-marketed. Money Market Funds (MMFs) — the single most successful financial product in the last decade — have been branded as “investment products” when everything about them, from structure to behavior, screams savings.

This mislabeling is not innocent. It has created a psychological barrier. When you tell the average Kenyan to “invest,” they imagine risk, potential loss, expertise, charts, and complicated financial jargon. But when you tell them to save, they think about safety, stability, discipline, and building a cushion for emergencies. By branding MMFs as investments, the Capital Markets Authority (CMA) has unknowingly blocked millions of Kenyans from accessing the most user-friendly, low-risk savings tool available in the country.

MMFs are built on Treasury Bills, bank fixed deposits, and low-risk government-backed instruments. These are savings assets — the safest in the entire financial ecosystem. They offer daily liquidity, capital security, and stable returns. They do not behave like equities, REITs, derivatives, or high-risk bonds. They do not require advanced financial literacy. They allow deposits as low as KSh 100. Yet the label “investment” has excluded the very audience that needs them most: the mwananchi struggling to save even KSh 50 a week.

Kenya’s savings crisis is well-documented. According to FinAccess data, our gross savings rate has stagnated between 12–14% of GDP for over 20 years — far below the African average and embarrassingly lower than Rwanda, Uganda, or Tanzania. Our pension penetration is under 20%, our emergency savings culture is collapsing, and over 70% of households cannot raise KSh 10,000 in an emergency. Banks offer 2–3% interest on savings accounts — a joke in an inflationary environment where buying power evaporates overnight. And yet, MMFs routinely deliver 9–12%, sometimes higher, while protecting capital.

Read Also: Money Market Funds: It’s Not About Sky-High Returns, It’s About Stability, Integrity, And Peace Of Mind

If CMA formally reclassifies MMFs as SAVINGS PRODUCTS, Kenya will witness a financial revolution. Suddenly, millions of Kenyans who fear the term “investment” will see MMFs for what they truly are: smart savings wallets. This simple change in language can unlock billions in dormant cash. Kenyans currently sit on over KSh 1.9 trillion in idle bank deposits, earning almost nothing. Imagine even 30% of that moving into MMFs — this would inject almost KSh 600 billion into the domestic financial ecosystem, lowering borrowing costs, increasing liquidity, and powering local projects, SMEs, county development funds, and community-driven initiatives.

A clear definition from CMA is not a cosmetic change; it is an economic strategy. It will rewire mindsets. Schools, SACCOs, churches, chamaas, youth groups, and pension-lite households will adopt MMFs as their savings backbone. For decades, Kenya has blamed “poor financial habits” for our low savings rate — but the truth is simpler: people cannot adopt what they do not understand. Relabeling MMFs as savings tools will remove the psychological intimidation barrier, democratize access, and create a culture of disciplined saving.

CMA must step forward with courage. Regulators often fear making bold shifts, but this is one decision that will go down in history as the spark that revived Kenya’s household savings ecosystem. With the cost of living skyrocketing, debt distress growing, and SMEs collapsing due to lack of working capital, saving is no longer a personal virtue — it is a national survival strategy. Kenya cannot continue depending on foreign loans and Eurobond cycles when local capital is sleeping in zero-interest accounts.

This reform is long overdue. It is time to admit that the language used in financial regulation shapes public behavior. It is time to align MMFs with their true purpose. It is time to unleash a savings revolution that will empower families, strengthen SMEs, deepen capital markets, and reduce Kenya’s dangerous overreliance on external debt.

If CMA acts boldly, Kenya will finally build a nation where saving is normal, accessible, dignified, and rewarding — and where local capital, not external borrowing, fuels our future.

Read Also: Money Market Funds Should Be Marketed As Saving Products, NOT Investment Options