What to Expect from MMFs, Saccos, Special Funds, and Other Investments in 2026

For many Kenyans looking for passive income opportunities, 2025 was the year the "T-Bill party" finally began to wind down. 

After a period of record-high interest rates that saw Money Market Funds (MMFs) and T-bills delivering double-digit returns, the tide has turned. As we enter 2026, the Central Bank of Kenya’s (CBK) persistent rate-cutting cycle—which brought the benchmark rate down to 9.0% by December 2025—has changed the passive income landscape in Kenya. 

The CBD’s sustained cuts on the Central Bank Rate (CBR) has also affected returns on savings accounts. In many ways, passive income is no longer a matter of simply parking cash; the investment vehicle is something many Kenyans are actively thinking about. 

This article breaks down the performance of major asset classes in 2025 and offers an outlook of what to expect in 2026. 

Also read: Best Performing MMFs and Their Returns in November 2025

1. Money Market Funds (MMFs)

Money Market Funds remain the most popular "parking bay" for Kenyan capital, but they are currently undergoing a painful repricing. In 2024, it was common to see net returns as high as 12% to 15%. By the close of 2025, the industry average has settled closer to 7.8% – 9.0%.

• Why the Drop? MMFs primarily invest in short-term government paper (T-Bills). As the 91-day T-Bill rate plummeted from nearly 16% to under 8% by December 2025, fund managers have been forced to roll over maturing investments into much lower-yielding instruments.
• The 2026 Outlook: Despite the cut in returns, the MMF sector reached an impressive Ksh400 billion in Assets Under Management (AUM), the market is becoming crowded. In 2026, competition is likely to favour fund managers who have lower management fees and offer innovative ways of accessing funds. For investors, MMFs are transitioning from "wealth-building tools" to more of liquidity management and emergency funds.

Also read: All You Need to Know About Safaricom’s MMF: Ziidi

2. SACCOs

SACCOs remain a popular savings and borrowing vehicle in Kenya, with total member deposits exceeding Ksh1.2 trillion. 2025 was a rough year for SACCOs, and the strength in recovery with be tested in 2026. 

The Ksh13.3 billion KUSCCO scandal nearly brought the entire SACCO movement to its knees. While asset recovery is underway, many affiliate SACCOs were forced to make significant provisions for these losses in late 2025. For the member, this means lower dividend payouts in 2026 as SACCOs prioritize rebuilding their capital buffers over immediate cash distributions.

Many rogue SACCOs face a mass closure in 2026 for non-compliance. In December 2025, the government threatened to deregister 25,000 Saccos, citing non-compliance issues, including failure to hold annual general meetings (AGMs) and poor transparency of financial dealings.

As part of the corporate governance reforms, the Ministry of Cooperatives has announced that small saccos will be merged to make them more viable.

One of the most promising news in the SACCO movement is the ongoing discussion between the Cabinet Secretary for Cooperatives and the Nairobi Securities Exchange (NSE). 

The proposal to list SACCO shares on the NSE could finally unlock liquidity for members who have historically been "locked in" to their shares. This would allow you to trade your SACCO equity just like company shares, providing a transparent market value for your savings.

Also Read: How Long It Takes to Double Your Investment in MMF, SACCO, Bond & Land

3. Special Funds

Special funds are increasingly popular among investors seeking higher returns and portfolio diversification. These funds pool money to invest in diverse markets such as stocks, bonds, metals, and currencies. 

Some funds, like Manza X, Oak Special Funds, and Kuza, have offered returns as high as 43%, attracting risk-tolerant investors looking for better yields than traditional savings or MMFs.

Currently, the total investments in special funds stand at Ksh137 billion, with 33 licensed funds operating under the Capital Markets Authority (CMA). The key advantage of special funds is diversification, allowing investors to spread their risk across multiple assets while targeting higher returns.

Also Read: Mansa X: All You Need to Know About the Special Fund Offering 24% Returns

4. Bonds

In 2026, the government plans to continue borrowing to fund the 2025/2026 budget, including taxable bonds and infrastructure bonds, which are tax-free and attract investors looking for long-term, stable returns.

However, there is a concern about debt sustainability for the government, as Kenya’s public debt continues to rise past the Ksh12 trillion mark. While bonds can be a reliable income source, there has been some fear about whether the government will make the repayments given the fiscal pressures facing the country.

However, in the last quarter of 2025, there were corporate bonds issued by leading companies in the country. Safaricom’s tax-free green bond (which raised Ksh41.86 billion) and EABL’s corporate bond which 

The first tranche of the Safaricom bond offered investors a tax-free return of 10.4% while EABL offered 11.8% returns (which attracted a 15% withholding tax). Meanwhile, government bonds, which attract Withholding Tax, have been offered between 12-14% interest rate.

The growth in corporate bonds could present bigger opportunities for investors to diversify between government and corporate bonds.

5. Nairobi Securities Exchange (NSE) 

 The Nairobi Securities Exchange (NSE) has had a boom in 2025. After years of being "undervalued," the bourse staged its most powerful recovery in over a decade.

According to The Kenyan Wallstreet, investor wealth on the NSE jumped by over Ksh 1.04 trillion in 2025. Total market capitalization catapulted from Ksh1.94 trillion in January to cross the Ksh3 trillion mark by November. The NSE All Share Index (NASI) recorded a staggering year-to-date return of over 53%, making it one of the top-performing indices globally in 2025.

• Government share sales: The government is selling Safaricom its 15% stake to Vodacom in a Ksh245 billion deal, which may affect market dynamics. The government also plans to list other assets such as Kenya Pipeline Company in 2026, offering investors an opportunity to invest in the company.
• Corporate mergers and acquisitions: Talks of Stanbic Bank buying NCBA have pushed the price up to a high of Ksh91 in October 2025. The shares have since fallen back to the region of Ksh80. More progress of the deal is expected in 2026. Also, Diageo announced the sale of its EABL stake to Japan’s Asahi Holdings in December 2025. 
• Trading flexibility: Effective August 1, 2025, the NSE abolished the minimum trading requirement of 100 shares, allowing investors to buy and sell in multiples of a single share. This lowers entry barriers and increases accessibility for small investors. The NSE also launched a sector index futures for the banking sector.

Editor's Note: We know many of our readers are looking for opportunities that go beyond standard market returns. If you're interested in learning more about special funds from the fund managers directly, please fill your details here.