This archive report was first published on 11 October 2019.
Published on October 11, 2019, money market funds have emerged as a viable solution for enhancing financial inclusion in Kenya.
One of the primary reasons for their popularity is the ease of transaction. Most money market fund managers have developed mobile apps and USSD services, allowing investors to sign up, deposit, and withdraw funds from their mobile phones.
This convenience has made it possible for Kenyans across the country to become investors without having to visit the service provider's offices.
Another factor contributing to their popularity is the low initial and top-up minimums. Many money market funds have affordable initial capital and top-up fees, making investing accessible to more citizens.
For instance, the Cytonn Money Market Fund allows investors to sign up with as little as KSh 1,000 and top up with any amount they have, without a minimum requirement.
Additionally, money market funds offer easy withdrawal options. Depending on the fund manager, withdrawals can be instant or take 1-2 days to process, making them ideal for short-term investments.
The ease of access to investments has made people more willing to invest, as they are assured they can get their money should they need it.
Furthermore, the low transaction costs associated with moving funds from a money market fund account to a mobile wallet have increased financial inclusion in the country.
Many money market funds provide services such as depositing and withdrawing from the mobile wallet to the MMF account free of charge, reducing management and transaction fees.
Lastly, money market funds offer attractive interest rates, with the top MMF in Kenya having an average yield of 11%.
Clearly, money market funds play a significant role in getting more Kenyans to invest, offering convenience, affordability, and attractive interest rates.
