The Kenyan investment scene has evolved rapidly in the last decade, with Collective Investment Schemes (CIS) standing out as one of the most reliable and fastest-growing investment vehicles.
By pooling funds from thousands of individuals and institutions, CIS opens doors for ordinary investors to access professional money management and diversified portfolios that would otherwise be out of reach.
As of June 30, 2025, there were 55 approved Collective Investment Schemes in Kenya, covering 234 different funds, with 40 actively operating.
These schemes now collectively manage Ksh 596.3 billion in assets under management (AUM) — a phenomenal rise of 953% since 2018, when total AUM stood at just Ksh 56.6 billion.
This post provides a detailed look at Collective Investment Schemes in Kenya: what they are, how they are regulated, the different types of funds available, and why they are becoming central to wealth management for individuals, corporates, and institutions.
What are Collective Investment Schemes?
A Collective Investment Scheme (CIS), also known locally as a unit trust fund, is a financial structure that pools money from multiple investors and invests it into a broad range of assets such as government securities, bonds, equities, deposits, and alternative instruments.
Investors buy units of the fund, each representing a proportional share of the overall pool. A professional fund manager then allocates the capital across various investments based on the scheme’s objectives.
Returns — whether interest, dividends, or capital gains — are distributed to investors according to their units.
Key Features of CIS in Kenya
- Pooling of Resources – By combining small contributions from many investors, CISs create large investment pools capable of accessing diverse instruments. Even with as little as Ksh 500 or Ksh 1,000, investors can participate in the same markets as corporates and high-net-worth individuals.
- Professional Fund Management – Investors benefit from the expertise of licensed fund managers who make informed decisions about where to allocate capital. This relieves investors from the burden of tracking markets daily.
- Diversification Across Assets – CISs spreads investments across various classes such as government securities, corporate bonds, bank deposits, and equities. This diversification reduces exposure to the failure of any single asset.
- Liquidity – Unlike fixed deposits that may tie money down for months, many CIS products — especially Money Market Funds — allow withdrawals within two to three working days. This makes them suitable even for short-term financial goals.
- Accessibility and Inclusion – CISs lowers the barrier to entry, making investing accessible to a broad audience, including salaried professionals, SMEs, corporates, SACCOs, and even students.
- Regulation and Safety – With oversight from the Capital Markets Authority (CMA) and involvement of custodians and trustees, CIS offers a high level of transparency and safety for investor funds.
Regulation of Collective Investment Schemes in Kenya
CISs are among the most heavily regulated financial products in Kenya, overseen primarily by the Capital Markets Authority (CMA). This regulatory framework is designed to protect investors, maintain confidence in the financial system, and ensure that fund managers operate transparently.
Key Regulatory Elements:
- Capital Markets Authority (CMA) – Approves every CIS before launch, sets the operational rules, and ensures that reporting is consistent and accurate.
- Fund Managers – Licensed professionals or institutions responsible for running the fund’s day-to-day investment decisions.
- Trustees – Independent third parties (often banks) who act as watchdogs, ensuring fund managers act in the best interests of investors.
- Custodians – Licensed banks or institutions that hold the actual securities in safekeeping, ensuring assets are separate from the fund manager’s own accounts.
- Auditors – Independent firms that audit the CIS to provide an additional layer of accountability.
Additionally, CMA prescribes limits on exposure to different asset classes. For example, as of Q2 2025, 41% of CIS assets were invested in government securities, 35% in fixed deposits, and 10% in cash balances.
This ensures that investor funds remain largely in safe, regulated, and trackable investments.
Growth of Collective Investment Schemes in Kenya
The rise of Collective Investment Schemes in Kenya has been nothing short of transformative. Over the past seven years, these funds have grown from a niche product known only to a few sophisticated investors into a mainstream vehicle embraced by over two million Kenyans.
Explosive Asset Growth
Between March 2018 and June 2025, total assets under management (AUM) expanded from Ksh 56.6 billion to Ksh 596.3 billion, representing an extraordinary 953% growth. This trajectory shows not only a rising appetite for regulated investments but also a deepening trust in structured financial solutions.
The surge was particularly accelerated in the post-COVID era when Kenyans became more aware of the importance of safety nets, liquidity, and regulated alternatives to informal investment channels.
Market Leadership and Concentration
Although the industry has grown in size and diversity, the market remains concentrated in the hands of established fund managers. The top five — Sanlam, CIC, Standard Investment Bank, NCBA, and Britam — command about 64% of the market share, together managing more than Ksh 381 billion.
This concentration has both positives and negatives: on one hand, it reflects investor confidence in large, trusted institutions; on the other hand, it challenges smaller fund managers to innovate and differentiate themselves to capture investor attention.
Surge in Retail Investor Participation
Another striking trend has been the democratization of investing. The number of investors ballooned from 1.1 million in March 2024 to 2.46 million in June 2025, marking an 81% increase in just one year.
The main drivers here are digital onboarding platforms, mobile USSD access, and lower minimum entry thresholds. Investors who once thought they needed large sums to participate in structured investments are now comfortably investing Ksh 500–1,000 in regulated funds.
Institutional Uptake
Collective Investment Schemes are not just for individuals. Corporations, SACCOs, NGOs, and pension funds are increasingly allocating reserves into CISs as part of their treasury management strategies.
Money Market Funds, in particular, have become the default parking spot for institutional liquidity because they combine safety, liquidity, and competitive yields.
Types of Collective Investment Schemes in Kenya
When looking at Collective Investment Schemes in Kenya, it’s clear that their strength lies in variety.
Investors are not limited to a “one-size-fits-all” approach — instead, they can choose from a wide range of funds that fit different financial goals, time horizons, and risk appetites.
This flexibility is one of the reasons why CISs have grown so quickly in popularity.
Broadly, the main types of CIS available in Kenya are:
1. Money Market Funds (MMFs)
Money Market Funds are the foundation of CISs in Kenya and the most widely used by both individuals and institutions. These funds invest in short-term, low-risk financial instruments such as Treasury bills, commercial papers, and bank fixed deposits.
The main attraction of MMFs is safety and liquidity. They are designed to preserve your principal while giving a modest return that often beats what banks pay on savings accounts.
Withdrawals are typically processed within two to three days, making them highly liquid.
They are popular because:
- They require very little to get started — sometimes as little as Ksh 500.
- They act as a great emergency fund or a place to park money while deciding on longer-term investments.
- They provide businesses and SACCOs with a cash management solution that keeps idle funds productive.
Practical scenario: A parent saving for school fees due in three months could use an MMF. Their money grows during that period while still being accessible when fees are needed.
2. Fixed Income Funds (Bond Funds)
Fixed Income Funds take the next step up from MMFs. Instead of focusing on short-term instruments, they invest in medium- and long-term bonds, including government securities and corporate debt.
These funds carry slightly more risk due to interest rate fluctuations, but they usually offer better returns than MMFs. They are particularly suited for investors who want to earn regular income or are planning for goals in the medium term (2–5 years).
They are popular because:
- They offer predictable interest income, making them attractive to retirees or income-focused investors.
- They are less volatile than equities, offering stability.
- Some are denominated in foreign currencies like USD, providing a hedge against currency depreciation.
Practical scenario: A professional planning to buy a car in three years may choose a Fixed Income Fund to steadily grow their savings while keeping risk moderate.
3. Equity Funds
Equity Funds are growth-focused. They pool investor money to purchase shares of companies listed on the Nairobi Securities Exchange (NSE) and sometimes regional or global stock markets.
These funds are higher risk because stock markets fluctuate daily, but they also have the highest long-term return potential. They are ideal for investors with a long-term horizon (5–10 years or more) who can tolerate short-term ups and downs.
They are popular because:
- They provide access to the stock market without requiring deep knowledge of individual companies.
- They offer potential for capital growth that can significantly outpace inflation.
- They allow investors to benefit from dividends and capital gains.
Practical scenario: A 30-year-old professional saving for retirement in 25 years could benefit from the growth potential of Equity Funds, since short-term market swings won’t affect their long-term plan.
4. Balanced Funds
Balanced Funds mix equities, bonds, and cash equivalents into one portfolio. They are designed to balance the growth of equities with the stability of bonds and liquidity of money markets.
This combination makes them less volatile than pure equity funds but with higher return potential than fixed income or money market funds. They are often chosen by investors who want moderate growth with reduced risk.
They are popular because:
- They provide diversification in a single fund.
- They reduce the burden of choosing and managing multiple funds separately.
- They suit medium- to long-term savers who want to see steady progress without extreme highs and lows.
Practical scenario: A family saving for a child’s university education in 8 years may choose a Balanced Fund to achieve growth while maintaining some protection against market downturns.
5. Special Funds
Special Funds are the “customized” part of CISs. They can include offshore funds, multi-asset strategies, Shariah-compliant products, or structured funds designed for specific needs.
They are more flexible than traditional CIS categories and can cater to niche or sophisticated investors. Their returns may be higher, but their structures can be more complex.
They are popular because:
- They provide access to unique investment strategies not found in standard CIS.
- They often allow exposure to international assets or non-traditional instruments.
- They can be tailored to specific religious, institutional, or thematic needs.
Practical scenario: A Muslim investor seeking Shariah-compliant returns may prefer an Islamic Special Fund that avoids interest-bearing securities and invests in ethical businesses.
6. Foreign Currency Funds
Foreign Currency Funds are denominated in hard currencies like USD, Euro, or Sterling. They are becoming increasingly popular due to the depreciation of the Kenyan shilling and global financial integration.
They are popular because:
- They offer a hedge against shilling depreciation, which erodes local returns.
- They attract diaspora investors who earn and remit money in foreign currency.
- They provide global diversification, even while being regulated locally by the CMA.
Practical scenario: Parents saving for their child’s tuition abroad in USD can use a dollar-denominated fund to avoid currency mismatch when fees are due.
Comparison Table of CIS Types in Kenya
Here’s a simplified table to summarize the different fund types:
| Fund Type | Risk Level | Time Horizon | Liquidity | Best For |
| Money Market Funds | Low | 0–2 years | Very High | Emergency savings, short-term goals, SMEs & corporates with surplus cash |
| Fixed Income Funds | Moderate | 2–5 years | Moderate | Retirees, income seekers, medium-term planners |
| Equity Funds | High | 5+ years | Moderate | Long-term investors, wealth builders, and inflation hedging |
| Balanced Funds | Moderate | 3–7 years | Moderate | Families saving for education, moderate-risk investors |
| Special Funds | Varies | 1–10 years+ | Varies | Sophisticated investors, corporates, niche investors |
| Foreign Currency Funds | Moderate | 2–7 years | Moderate | Diaspora, parents with USD tuition needs, businesses with FX obligations |
Key Trends Driving Collective Investment Schemes in Kenya
The growth of Collective Investment Schemes in Kenya is not just about rising numbers; it reflects more profound shifts in investor behavior, technology adoption, and economic realities. Several key trends are shaping the industry:
1. Increased Financial Literacy
Financial literacy campaigns, social media influencers, and targeted education by fund managers have made CISs much more accessible to the public. In the past, many Kenyans viewed investing as something reserved for the wealthy or institutions.
Today, content on YouTube, LinkedIn, and even TikTok explains concepts like Money Market Funds and Fixed Income Funds in simple language. This surge in awareness has helped dismantle myths that investing is “too complex” or “too risky.”
Now, even first-time investors feel confident about opening accounts with just a few hundred shillings, making CISs a household name. In addition, schools and corporates are increasingly running financial literacy programs, embedding CISs into long-term financial planning discussions.
2. Digital Accessibility
The digital revolution has played a massive role in opening up CISs to millions of Kenyans. Fund managers now provide mobile apps, USSD codes, and online platforms where investors can sign up, top up, and redeem funds instantly.
In the past, investing required filling out long forms, visiting offices, and waiting weeks for transactions to clear.
Today, someone can set up a CIS account in under five minutes using a smartphone and M-Pesa. This convenience has bridged the gap between traditional savings and formal investment.
It’s no coincidence that investor numbers more than doubled between 2024 and 2025; digital onboarding removed friction and gave Kenyans immediate control over their investments.
3. Shift from Bank Deposits
For decades, banks were the default option for saving. However, stagnant returns and high inflation have pushed investors to look for better alternatives.
A typical savings account might pay less than 2–3% annually, while inflation can run above 7–8%. This means money in the bank is actually losing value.
By contrast, Collective Investment Schemes in Kenya, particularly Money Market Funds, offer annualized returns above 10%. The math is clear for most Kenyans: keeping money idle in a bank account doesn’t make sense anymore.
This shift has fueled the migration of funds from dormant bank accounts to MMFs and other CIS categories.
4. Product Innovation
The CIS industry in Kenya has matured to the point where fund managers now offer specialized products beyond the standard money market or bond fund.
These include Shariah-compliant funds that appeal to faith-based investors, offshore funds that provide access to global markets, and structured funds designed for specific institutional clients.
Innovation also extends to packaging: some fund managers now offer goal-based savings accounts linked to CISs, where clients can invest for weddings, education, or business projects.
This evolution shows that fund managers are listening to customer needs and adapting products to fit real-life goals rather than just offering generic options.
5. Institutional Uptake
Institutions are playing a bigger role in CIS growth. SACCOs, for instance, are now investing surplus funds into MMFs to earn better returns for members.
NGOs and corporates use CISs for treasury management, ensuring that idle cash is both safe and productive.
Even pension funds are increasingly channeling money into fixed income and balanced funds for stable, long-term growth. This institutional uptake not only boosts assets under management but also adds credibility to the entire CIS sector.
When organizations with financial expertise trust these funds, retail investors feel reassured that they, too, are making the right choice.
Risks and Considerations in Collective Investment Schemes in Kenya
While Collective Investment Schemes in Kenya are regulated and relatively safe compared to unregulated alternatives, they are not without risks. Every investor must understand these risks before committing funds, as returns are not guaranteed.
1. Market Risk
This is especially relevant for equity funds and certain special funds. The value of these investments rises and falls depending on stock market performance, company results, and global events.
For instance, during economic downturns or political instability, stock markets often decline, reducing fund values. Investors must be ready for short-term losses if they choose growth-oriented funds.
2. Interest Rate Risk
Bond funds and fixed-income products are vulnerable to changes in interest rates. When rates rise, existing bonds with lower yields become less attractive, causing their prices to fall.
This can temporarily reduce the value of a Fixed Income Fund. Investors who withdraw during such periods may experience lower-than-expected returns, even if the long-term outlook remains stable.
3. Liquidity Risk
Not all CIS products allow instant redemption. While MMFs are highly liquid, some special funds or foreign currency funds may restrict withdrawals to specific timelines (weekly, monthly, or quarterly).
This means investors must plan ahead and avoid locking money they may urgently need into less liquid products.
4. Manager Risk
The expertise and integrity of a fund manager directly influence performance. A poorly managed fund could underperform its peers even if invested in similar instruments.
This is why due diligence is essential — investors should review fund managers’ track records, governance structures, and transparency in reporting before committing funds.
5. Currency Risk
For foreign currency-denominated funds, exchange rate fluctuations are a double-edged sword. If the Kenyan shilling depreciates, investors in USD funds enjoy higher local returns.
But if the shilling unexpectedly strengthens, the value of returns may decline when converted back to Kenya shillings. Investors must weigh whether they need foreign currency protection or not.
6. Inflation Risk
Even though CISs generally outpace bank savings, inflation can still erode real returns. For instance, if an MMF yields 10% annually but inflation is 9%, the real return is only 1%.
This underscores the need for investors to choose products that align with both their short-term and long-term financial goals.
Conclusion: The Future of Collective Investment Schemes in Kenya
Collective Investment Schemes in Kenya have transformed the way people save and invest. From just Ksh 56.6 billion in 2018 to nearly Ksh 600 billion in 2025, CISs have become the backbone of modern investment.
They provide diversification, liquidity, and professional management, while accommodating everyone from small retail investors to large corporations.
The future promises more innovation, stronger regulation, and digital adoption, with CISs cementing their role as the go-to wealth-building tool for millions of Kenyans.
FAQs on Collective Investment Schemes in Kenya
1. What is a Collective Investment Scheme in Kenya?
A Collective Investment Scheme is a regulated investment vehicle that pools funds from multiple investors to invest in diversified assets such as money markets, bonds, equities, and special products. Investors buy units of the fund and earn proportional returns.
2. How safe are Collective Investment Schemes in Kenya?
CIS are regulated by the Capital Markets Authority (CMA) and safeguarded by trustees and custodians. While market risks exist, they are considered safer than unregulated investment products.
3. What is the minimum investment for Collective Investment Schemes in Kenya?
Most CIS allow entry with as little as Ksh 500–1,000, though some funds, especially special or foreign currency funds, may require higher amounts. This makes CIS accessible to a wide range of investors.
4. Which type of Collective Investment Scheme is best for beginners?
Money Market Funds are often the best starting point. They are low-risk, liquid, and provide better returns than bank savings. As investors gain confidence, they can diversify into fixed income or equity funds.
5. How do I choose the right Collective Investment Scheme in Kenya?
Consider your goals, risk tolerance, and investment horizon. Compare fund performance, management fees, and liquidity terms. Consulting a licensed financial advisor can help tailor the right mix of funds for your portfolio.
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