Gen Z driving Kenya’s savings culture to digital collective investment schemes

For many generations, chamas, informal savings and investment groups have been the drivers of financial and savings culture in Kenya.

They have traditionally been associated with older generations pooling resources for wealth creation, investment and social support.

However, a new wave of young, tech-savvy Kenyans is redefining these groups, making them relevant to the digital age and their unique aspirations.

Kenya’s Gen Zs are bringing a fresh perspective to chamas through technology and new forms of financial solutions.

Unlike their predecessors, millennials and baby boomers who primarily saved for land purchases, school fees, or retirement, the younger generation investment schemes focus on innovative ventures, digital finance and social impact.

With only 12 per cent of its income being saved, Kenya lags behind its East African neighbours, Uganda and Tanzania, which boast savings rates above 20 per cent. 

“I save about Sh500 every week on the money market fund, my income is inconsistent so sometimes I just have to ensure that I save it when I can,” says Grace Njeri, 25, who is an online worker we met in Nairobi.

A 27-year-old Mary Kimani, is another of the many Kenyans who have recently switched gears from the traditional Sacco model to the Money Market Funds.

She says that a financial webinar through one of the social media platforms was a game changer in her decision.

Their stories mirrors the greater market trend that is now taking the Kenyan market by storm.

Unlike the past few years where number of Kenyans saving for rainy days has been slow, the first three months of 2025 has been the turning point according to Capital Markets Authority.

A new report by the Authority has shown that amid rising living costs and tightening economic conditions, more Kenyans are turning to collective investment schemes (CIS) as a safer and more accessible way to grow their savings.

Collective investment schemes work by pooling money from multiple investors to purchase a diversified portfolio of assets such as bonds, equities, and real estate.

Popular products include money market funds, which offer short-term, low-risk returns and balanced funds that mix income and growth strategies.

Data from the Capital Markets Authority shows that the number of Kenyans savings in the schemes almost doubled in three months between January and March 2025.

The number of investors in the various CIS Funds has continued to grow steadily over time, buoyed by increasing awareness in the market to save and invest especially, post Covid era.

 In the last one year for instance, the number of investors has grown from 1,109,050 in March 2024 to 2,012,084, representing 81 per cent increase.

“This growth reflects a broader shift in financial behavior, with many individuals and small businesses seeking alternatives to traditional savings accounts and the volatile stock market,” said Capital Markets Authority CEO Wycliff Shamia.

The growth in number of Kenyans savings in these schemes grew sharpest between December 2024 and March 2025.

Once viewed as the preserve of high-net-worth individuals, collective investment schemes have become increasingly mainstream, in the three months’ number of Kenyans saving in these schemes grew by 602,781 from 1,409,303 to 2,012,084.

This saw assets under management in licensed collective investment schemes surged by over 20 per cent in the past year, surpassing Sh180 billion by March 2025.

Unlike traditional forms that relied on physical meetings, these schemes use digital banking solutions such as M-Pesa and fintech apps for secure and transparent transactions.

The trend comes at a time that the economic strain remains stubbornly high and lending rates have made bank loans less attractive.

Many Kenyans are now prioritising savings and passive income, with CIS offering returns as high as 12 per cent annually on some money market funds.

Unlike Saccos, where funds are locked in and can only be accessed through loans, MMFs allow investors to withdraw their money at any time while still earning interest.

Despite these risks, industry analysts expect the popularity of collective investment schemes to continue growing, especially with the proliferation of digital platforms that allow investors to start with as little as Sh1,000.

According to CMA the local investment landscape has witnessed a notable surge in interest and applications for foreign currency-denominated funds, with both new and existing collective investment schemes seeking to tap into this growing market segment.

Dollar-denominated funds have emerged as the most popular option among investors, accounting for the vast majority of the 29 foreign currency funds currently in operation.

These include 27 dollar funds, alongside one euro-denominated and one South African rand (ZAR) fund. The funds span various categories, including money market funds, fixed income funds, and special investment vehicles.

These foreign currency-denominated funds reported assets under management (AUM) totaling Sh53.6 billion, representing 11 per cent of the total market share.

This marks a significant 28 per cent increase in AUM compared to Sh41.7 billion recorded at the end of Q4 2024.