Kenya’s Capital Markets Authority Approves Strategic Investment Products in Major Market Expansion

The Capital Markets Authority (CMA) has granted comprehensive approvals to expand Kenya’s financial sector, licensing four new intermediaries and approving innovative investment products that promise to revolutionize the country’s capital markets landscape. The strategic moves represent one of the most significant regulatory developments in Kenya’s financial sector this year, coinciding with the growing sophistication of the domestic investment ecosystem.

The regulator’s latest approvals include licensing TPXM Global Kenya Limited as a non-dealing Online Foreign Exchange Broker, Point Forty Investment Advisory Limited as an Authorised Securities Dealer (ASD), Silverhouse Capital Limited as an Investment Adviser, and Enwealth Impact Debt Fund Limited as an Alternative Investment Fund (AIF). Additionally, the CMA approved Etica Capital Limited to register the Etica Special Multi-Asset Fund (KES) under its unit trust platform, alongside approvals for Acorn Build-to-Rent Development REIT and Myxeno Investment Management Limited.

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Etica Capital: Pioneering Digital Investment Innovation

Etica Capital Limited, a licensed fund manager regulated by the CMA, has secured approval for its Etica Special Multi-Asset Fund (KES), marking a significant milestone in the company’s mission to revolutionize wealth management for retail investors through technology. The company, which has successfully developed Kenya’s first mobile-based money market fund called MALI in partnership with Safaricom M-Pesa, continues to push the boundaries of digital investment accessibility.

Etica Capital’s track record includes several industry firsts: successfully championing the first CMA sandbox project dubbed MALI (formerly Wekeza), developing the most interactive mobile-based application called G-kuze that enables retail clients to digitally onboard and trade NSE stocks, and achieving 100% cloud migration of investment bank technology infrastructure.

The company’s current product offerings demonstrate impressive performance metrics:

• Etica Money Market Fund (KES): Effective Annual Yield 17.55%
• Etica Money Market Fund (USD): Effective Annual Yield 6.99%
• Etica Fixed Income Fund (KES): Effective Annual Yield 15.62%
• Etica Shariah Fund (KES): Effective Annual Profit 9.64%
• Etica Wealth Fund: Class A (15.77%), Class B (16.01%), Class C (16.25%)

The newly approved Etica Special Multi-Asset Fund (KES) is designed to offer attractive risk-adjusted investment returns and financial flexibility to clients, aligning with the company’s mission to create innovative investment products that aid in deepening capital markets in Kenya.

Acorn Holdings: Transforming Affordable Housing Investment

The approval of Acorn Build-to-Rent Development REIT represents a groundbreaking development in Kenya’s affordable housing sector. Managed by Acorn Investment Management Limited, this REIT is specifically designed to expand Kenya’s affordable rental housing market, enabling investors to participate in large-scale, professionally managed rental property developments.

Acorn Holdings, established in 2001, has positioned itself as Africa’s leading provider of Purpose-Built Student Accommodation (PBSA). The company’s impressive track record includes:

Major Funding Achievement: In 2024, Acorn Holdings secured USD 180 million (KES 23.6 billion) funding from the U.S. Development Finance Corporation (DFC) to develop 35 new affordable student housing units in Kenya, providing 48,000 beds for students and creating over 50,000 jobs.

REIT Innovation: The company has pioneered Real Estate Investment Trusts in Kenya, launching the Acorn Student Accommodation Development REIT (ASA D-REIT) and the Acorn Student Accommodation Income REIT (ASA I-REIT), which are expected to provide long-term investors with a blended return of 18% on a 10-year hold basis.

Market Need: Kenya has approximately 550,000 students enrolled in universities against a bed capacity of only 40,000 beds, creating a massive demand-supply gap that Acorn’s developments are designed to address.

The new Build-to-Rent REIT extends Acorn’s successful model beyond student accommodation to broader affordable rental housing, addressing Kenya’s significant housing deficit while providing investors with exposure to professionally managed real estate developments.

Broader Capital Markets Growth Context

These approvals occur within the context of unprecedented growth in Kenya’s capital markets. The fund management sector has experienced remarkable expansion, with the number of licensed fund managers now reaching 47, representing a growing interest in the pooled funds segment.

Assets Under Management Surge: Assets under management in Collective Investment Schemes have risen to Ksh596 billion as of June 30, 2025, reflecting increased investor confidence and market sophistication.

Market Diversification: The Money Market Fund sector in Kenya has experienced remarkable growth, with data from the CMA showing that as of September 2024, the total assets under management for all Collective Investment Schemes exceeded KSh 300 billion.

Digital Innovation: The sector is witnessing significant digital transformation, with platforms like the recently approved Cashlet App and Vuka investment platform making real estate investment accessible to retail investors with minimum investments as low as KES 5,000.

New Market Participants and Their Impact

TPXM Global Kenya Limited: Expanding Trading Access

Licensed as a non-dealing Online Foreign Exchange Broker, TPXM Global Kenya Limited will provide online trading services in foreign exchange, commodities, equities, and contracts for differences (CFDs) on underlying assets. This licensing significantly expands access to international financial markets for Kenyan investors, democratizing sophisticated trading instruments previously available only through international brokers.

Point Forty Investment Advisory Limited: Comprehensive Investment Solutions

As an Authorized Securities Dealer (ASD), Point Forty Investment Advisory Limited will provide bespoke investment solutions across government securities (Treasury bonds and bills) and listed equities on the Nairobi Securities Exchange. The company specifically targets institutional, high-net-worth, and retail investors, ensuring comprehensive market coverage across different investor segments.

Silverhouse Capital Limited: Professional Advisory Services

Licensed as an Investment Adviser, Silverhouse Capital Limited strengthens Kenya’s advisory segment, providing professional investment guidance and portfolio management services. The licensing expands the pool of qualified investment advisors available to Kenyan investors seeking sophisticated financial planning and investment strategies.

Enwealth Impact Debt Fund Limited: Alternative Investment Focus

The approval of Enwealth Impact Debt Fund Limited as an Alternative Investment Fund (AIF) introduces specialized debt investment capabilities to Kenya’s market. Alternative investment funds represent a growing global segment, offering investors exposure to non-traditional asset classes and investment strategies that can provide portfolio diversification and potentially higher returns.

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Market Infrastructure and Regulatory Excellence

The CMA’s proactive licensing approach reflects Kenya’s position as a leading capital market in the East African region. The authority’s regulatory framework encompasses several key functions:

Comprehensive Oversight: Licensing and supervising all capital market intermediaries while ensuring compliance with legal and regulatory frameworks.

Market Development: Promoting market development through research on new products and services, including the innovative sandbox program that has tested platforms like MALI and the Cashlet App.

Investor Protection: Enhancing investor education and public awareness while protecting investor interests through robust regulatory oversight.

Innovation Support: Supporting homegrown fintech innovations that expand participation in capital markets, enhance investor protection, and advance financial inclusion.

Regional and International Context

Kenya’s capital markets development occurs within a broader regional integration framework. The African Exchange Linkage Project (AELP) represents a historic milestone in regional stock market integration, aiming to enhance African bourses and encourage cross-listings throughout the continent. Through this program, Kenyans can now invest in South African stocks and vice versa, increasing liquidity and diversifying investment opportunities.

The approval of international trading platforms like TPXM Global and the expansion of offshore investment options reflect Kenya’s integration with global financial markets. Recent data shows offshore investments surged by 4,282%, reaching KSh 19.6 billion, largely attributed to specialized funds that allocate significant portions of their portfolios to international assets.

Digital Transformation and Financial Inclusion

The capital markets sector is experiencing significant digital transformation, with several key developments:

Mobile-First Approach: Companies like Etica Capital have pioneered mobile-based investment platforms with minimum investments as low as KES 100, making sophisticated financial products accessible to ordinary Kenyans.

Digital Onboarding: Modern investment platforms offer three-minute digital onboarding processes, eliminating traditional barriers to investment market participation.

Integrated Payments: Partnership with mobile money platforms like M-Pesa enables seamless fund transfers and investment management through familiar payment channels.

Real Estate Democratization: Platforms like Vuka enable retail investors to access regulated real estate investments from as little as KES 5,000, previously available only to institutional investors.

Investment Performance and Market Competitiveness

Kenya’s investment sector demonstrates strong performance metrics across various fund categories:

Money Market Fund Performance

Leading money market funds are delivering competitive returns:

• CIC Money Market Fund: Approximately 10% effective annual yield, holding the largest market share
• NCBA Money Market Fund: Around 10.48% effective annual yield with fast withdrawal processing
• Lofty Corban Fund: Outstanding 14.90% effective annual yield
• Apollo Asset Management Fund: Strong performance with 2.42 billion shillings under management

Real Estate Investment Returns

Acorn’s REITs demonstrate the potential for attractive real estate returns:

• Blended Returns: Expected 18% returns on 10-year hold basis
• Dividend Yields: Income REITs must distribute at least 80% of distributable earnings annually
• Capital Appreciation: Potential for long-term capital gains through property value increases

Economic Impact and Development Goals

The expansion of Kenya’s capital markets aligns with broader economic development objectives:

Job Creation: Acorn’s housing projects alone are expected to create over 50,000 jobs, demonstrating the employment impact of capital market-funded developments.

Housing Deficit Solution: With Kenya facing a significant housing deficit, REITs like Acorn’s Build-to-Rent REIT provide innovative financing mechanisms for addressing accommodation challenges.

Financial Inclusion: Digital platforms and lower minimum investment requirements enable broader participation in wealth-building opportunities previously reserved for high-net-worth individuals.

Economic Growth: The World Bank projects Kenya’s GDP growth at 4.5% in 2025, with capital markets playing a crucial role in mobilizing domestic savings for productive investments.

Challenges and Opportunities

Market Challenges

Regulatory Compliance: The increasing number of market participants requires enhanced regulatory supervision to ensure compliance and maintain market integrity.

Investor Education: The introduction of sophisticated financial products necessitates corresponding improvements in investor education to ensure market participants understand associated risks and benefits.

Technology Infrastructure: The growth of digital financial services requires robust technological infrastructure and cybersecurity measures to protect investor assets and personal information.

Growth Opportunities

Regional Expansion: Kenya’s capital markets can serve as a gateway for regional investment flows, particularly through initiatives like the African Exchange Linkage Project.

Product Innovation: Continued innovation in investment products, including ESG-focused funds and technology-sector investments, can attract new categories of investors.

International Integration: Enhanced integration with global financial markets through platforms like TPXM Global can provide Kenyan investors with broader diversification opportunities.

Future Outlook and Strategic Vision

The CMA’s strategic approvals position Kenya’s capital markets for sustained growth and enhanced regional leadership. Key future trends include:

Sustainable Finance: Growing awareness of environmental, social, and governance (ESG) considerations is driving demand for sustainable and impact investing products.

Technology Integration: Continued integration of technology in financial services will improve access, reduce costs, and enhance the investor experience.

Regional Leadership: Kenya’s capital markets are well-positioned to serve as a regional hub for East African financial services, attracting international investment and expertise.

Product Diversification: The expansion of investment products, including innovative instruments like agriculture and infrastructure REITs, commodity ETFs, and carbon credit exchanges, will accommodate diverse investor requirements and promote risk mitigation.

Conclusion: A Transformative Period

The Capital Markets Authority’s comprehensive approvals of new market participants and innovative investment products represent a transformative period for Kenya’s financial sector. The combination of Etica Capital’s digital innovation, Acorn’s affordable housing solutions, and the diversified range of new financial service providers creates a more inclusive, sophisticated, and accessible capital markets ecosystem.

With fund managers now numbering 47 and assets under management reaching Ksh596 billion, Kenya demonstrates remarkable progress in developing a world-class capital markets infrastructure. The strategic focus on both traditional financial services and innovative digital platforms ensures that Kenya’s capital markets can serve diverse investor needs while maintaining appropriate regulatory oversight.

The approval of these new entities and products coincides with Kenya’s broader economic growth objectives, supporting job creation, addressing housing challenges, and promoting financial inclusion. As these newly licensed organizations begin operations, they will contribute to increased market competition, product innovation, and enhanced access to investment opportunities for both institutional and retail investors.

For investors, these developments translate into greater choice, improved access, and more sophisticated investment opportunities. For the broader economy, the enhanced capital market infrastructure supports long-term growth objectives through improved capital allocation and increased financial sector efficiency.

The CMA’s proactive approach to market development, demonstrated through these comprehensive licensing decisions, reinforces Kenya’s position as East Africa’s leading capital market and creates a strong foundation for future growth and regional integration. As the country continues to develop its financial sector infrastructure, these strategic approvals represent a crucial step toward achieving Kenya’s vision of becoming a regional financial hub while ensuring inclusive economic growth and sustainable development.

This expansion of Kenya’s financial services sector demonstrates the country’s commitment to developing a sophisticated, inclusive, and well-regulated capital markets ecosystem that serves both domestic and international investors.

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By: Montel Kamau

Serrari Financial Analyst

24th September, 2025