Introduction
In Kenya, the investment landscape is as diverse as it is promising, offering a range of options from stocks and bonds to real estate and beyond. This guide aims to provide you with key insights into the world of investing, helping you make informed decisions that align with your financial goals.
There’s a variety of investment avenues in Kenya. Each has its own risk/return profile and suitability depending on your goals and resources. Here are some of the main types:
1. Bank Deposits and Money Market Funds: These are often considered the starting point for new investors because they are low risk. A fixed deposit in a bank is essentially locking your money for a fixed term (months or years) at a fixed interest rate (usually higher than a normal savings account).
For example, you deposit KSh 100k for 1 year at 8% – you’ll get your 100k + 8k interest after one year. Fixed deposits in Kenya typically range from 6% to 12% interest depending on duration and bank.
Money Market Funds (MMFs), offered by investment firms (not banks), invest in short-term debt and offer you a yield. They are very popular as they often give around 8-10% and you can usually add/withdraw funds relatively flexibly (though withdrawals might take 2-3 days).
MMFs are a form of unit trust. Examples: CIC Money Market Fund, NCBA MMF, Britam MMF, etc. These are good for parking emergency funds or saving for short-term goals with a bit of growth.
2. SACCO Shares/Deposits: If you’re a member of a SACCO, the money you contribute as deposits effectively becomes an investment as well, since SACCOs pay interest on deposits (often called an interest rebate) and dividends on share capital.
As noted earlier, some SACCOs have impressive payouts – e.g., interest on deposits around 7-12% and dividends on shares sometimes 15-20%knowclickmedia.co.keknowclickmedia.co.ke for top performers.
The caveat is you usually can’t withdraw your SACCO deposits on demand unless you leave the SACCO or find someone to offset your shares, and sometimes your deposits are collateral for any loans you take.
But for many Kenyans, SACCOs are a reliable medium-term investment, essentially functioning like community banks. They also instill discipline as contributions are typically monthly.
3. Stocks (Equities): Buying shares of companies listed on the Nairobi Securities Exchange (NSE). There are over 60 listed companies (like Safaricom, Equity Bank, KPLC, EABL, KCB, etc.).
When you buy shares, you hope to gain in two ways: the share price goes up (you can later sell for profit) and through dividends if the company distributes part of its profits.
For example, Safaricom has historically paid good dividends, making it attractive to income-focused investors.
Stocks can be volatile – prices can drop due to company issues or economic downturns. But over the long term, a well-chosen stock can multiply in value. Kenyan stocks have had mixed performance in recent years, but some have done very well historically (Safaricom’s stock, offered at IPO at KSh 5 in 2008, is around KSh 15-20 in 2025 and has paid dividends nearly every year, so total return has been substantial).
To invest, you need to open a CDS account through a stockbroker. You can then trade online or via broker. The minimum investment is the cost of at least 100 shares (lot size is 100) of a given company.
Some stocks are quite cheap (penny stocks under KSh 1), others like BAT or Co-operative Bank might be tens of shillings per share. Stock investing requires research into company financials or following recommendations from financial advisors, and one must be prepared for ups and downs.
4. Bonds (Treasury and Corporate): Treasury Bonds are issued by the Government of Kenya, typically through auctions overseen by the Central Bank (CBK). They range in tenor (duration) from 1 year to even 30 years. Common ones are 2, 5, 10-year bonds, etc. They pay interest (coupon) every six months. For example, a recent 5-year bond might have a coupon of 11% – meaning if you invest KSh 100k, you get KSh 5,500 every six months. At maturity, you get back the principal.
Treasury bonds are very secure (almost zero default risk) and relatively stable; however, if you need to sell before maturity, the price you get will depend on prevailing interest rates (bond prices fall if interest rates rise and vice versa).
The CBK has made it easier to invest in bonds by allowing minimum amounts (as low as KSh 3,000 for M-Akiba bond, and usually KSh 50,000 for regular auctions) and using mobile money for certain bonds.
Corporate bonds are issued by companies to raise funds (e.g., in past EABL, Safaricom, and some banks have issued bonds). These usually offer slightly higher interest than government bonds to compensate for higher risk (company could default, though it’s rare for top companies). One has to be cautious with corporate bonds by smaller firms – there have been cases of default (like ARM Cement’s bond defaulted). In general, bonds are good for steady income and preserving capital, not so much for high growth.
5. Real Estate (Property): This includes land, residential houses, commercial buildings, etc. Kenyans famously love real estate, viewing land as an ever-appreciating asset. Investing in land might mean buying a plot anticipating its value will go up as area develops (common in outskirts of cities or upcoming towns). Investing in rental real estate means buying/building property to rent out for income. Real estate can yield both rental income (if you rent it) and capital gains (if property values rise).
Indeed, many who bought plots or houses a decade ago in Nairobi or its suburbs have seen prices more than double. However, real estate requires substantial capital and has low liquidity. It also has costs – maintenance, property tax (land rates), and risks like vacancies or bad tenants. There’s also the due diligence needed to avoid fraud (ensuring the title is clean, etc.).
For those without huge capital, an alternative is investing in REITs (Real Estate Investment Trusts) on the NSE – these are like unit trusts for property. Currently, Kenya has a few REITs (like ILAM Fahari I-REIT) which invest in income-generating real estate and trade on the stock exchange, allowing smaller investors to partake. Land banking (buying and holding land) is speculative but has paid off historically in many areas – yet one must consider that not all land rises equally (some remote areas may stagnate).
6. Business and Entrepreneurship: Putting money into your own business or someone else’s is a form of investment too. If you start a side business (say a salon, a M-Pesa shop, farming project, etc.), the money you inject is an investment expecting return (profits). This often can yield higher returns than passive investments if done right, but it comes with active work and high risk (many small businesses fail or take time to profit).
Another way is angel investing or crowdfunding – where you invest in another’s startup for a share of future gains – but this is less formal in Kenya unless you’re part of an angel network or know the entrepreneurs; it’s high risk because startups can fail, but if one succeeds, the returns can be huge (think early investors in companies like Twiga Foods or Cellulant, who would profit if those companies go big or get acquired). For most, investing in a business means growing their own enterprise – e.g., buying a matatu to operate, investing in dairy cows, or opening a kiosk. It’s very hands-on.
7. Alternative Investments: These include things like
Gold and precious metals (one can invest via commodity ETFs or buying physical gold, though the latter isn't common in Kenya except jewelry which isn't pure investment)
Forex trading (trading currencies – very risky and akin to speculation; many have lost money trying to day-trade currencies unless highly skilled)
Cryptocurrencies (Bitcoin, etc. – extremely volatile; a few Kenyans have dabbled, but it remains unregulated and risky; one should be very cautious and not invest money they can’t afford to lose), and
Collectibles (art, rare stamps/coins – niche and illiquid). These are generally for more experienced investors or those willing to take big risks for potentially big rewards.
Another emerging area is crowd-farming or agribusiness investments – some platforms allow you to invest in farming projects (e.g., buy a cow via an app and get returns from milk sales); again, caution is advised and one must vet the platform.
In deciding where to invest, consider factors like: your investment horizon (how long before you need the money back), your risk tolerance, the amount of capital you have, and your knowledge of that area. Often a mix is good – for example, you might keep some money in a money market fund (safe, for short-term needs), buy some shares for growth, and own a rental plot for income and long-term value. Starting out, many Kenyans do either real estate (once they accumulate enough) or unit trusts, because they are tangible or straightforward. Stocks and bonds require a bit more learning but are very accessible with even small money and are worth incorporating for diversification.