SCB Head of Wealth Management Paul Njoki

SCB Head of Wealth Management Paul Njoki speaks during the launch of the SC Shilingi Funds at Standard Chartered Bank Offices on February 15, 2022.

| Diana Ngila | Nation Media Group

Big firms now shift to small investors

When push comes to shove, survival mode automatically kicks in as a growing number of large corporates are realising amid slowed business opportunities.

The big boys are now playing in the same league with small ones after they were forced to change strategy when looking for investors.

Centum, Standard Chartered and Britam have recently launched mini-solutions that target ordinary Kenyans to invest as little as Sh5 as opposed to chasing inexistent billions or millions from a small club of high-net-worth individuals.

Coupled with the digital revolution that has made it possible to collect the tiny sums at scale incurring minimal costs, investment companies that have traditionally been elitist, are now on a race for the bottom.

Nabo Capital, a subsidiary of Centum Investment last week partnered with Moneto Ventures Limited to launch a new digital platform where Kenyans can invest as little as Sh5 through their mobile phones.

Create financial goals

The application dubbed Chumz enables anyone with a mobile money account to create financial goals as an individual or as a group and invest their money towards the goals, track progress and earn interest.

On its part, Britam has partnered with Fintech start-up Koa to offer a mobile savings venture giving Kenyans with as little as Sh1,000 access to fund managers for a 10 per cent return.

Britam Insurance also partnered with Telkom to provide the low-cost Sh20,000 insurance package called Life Bila Noma bundle for just Sh200 and Sh300 a month for Boda Boda’s and mama mbogas as they purchase mobile data, short message, and airtime from Telkom.

Standard Chartered Bank Kenya has also joined the fray with a money market fund business, allowing customers to make investments of as low as Sh1,000.

The product enables customers to move money from their current accounts daily, weekly, or monthly to the fund.

The bank has partnered with investment manager Sanlam Investments East Africa and global digital wealth technology provider Bambu to run the digital money market fund.

“The SC Shilingi Fund will enable all our existing and new clients to achieve their financial goals by starting their investment journey, diversifying their portfolios, and saving towards future needs while earning attractive returns,” Edith Chumba, head of the consumer, private and business banking at StanChart said.


Even stockbrokers are recruiting retail investors tearing down the barriers that created the perception that you needed hundreds of thousands of shillings to buy shareholding in listed companies.

Egyptian brokerage firm EFG Hermes launched a mobile application EFG Hermes One targeting retail investors with the firm’s Director - Frontier Equity Sales & Head of Equities Kenya, Muathi Kilonzo saying most people think that you need Sh1 million to sign up to the platform yet there are shares trading at less than a shilling.

“A lot of people have been asking me what is the minimum investment to sign up, do you need Sh1 million? I tell them even with Sh100 you can start trading the impression we get is people think buying shares is only for the rich,” Mr Kilonzo said.

With nearly 97 per cent of equities accounts used for trading at the Nairobi Securities Exchange (NSE) have been dormant in the past two years, most sophisticated retail investor market has gone eerily silent.

Investment companies had concentrated solutions on mostly high-end clients excluding the bulge at the bottom.

Dubbed wealth management business in corporate lingo the big businesses offered solutions for fixed income securities, portfolio restructuring and optimisation, investment loans for government securities, insurance products, equities, and offshore Investments.

Formidable investment

But as they waited in lofty glass edifices they are quickly realising the masons who built their offices, their watchmen, and tea girls have little change to spare that when collated are a formidable investment.

Collective Investments Schemes (CIS) might have done the trial run for the big boys over the last 3 years total assets held by the Unit Trusts have grown by over 80 percent crossed the Sh100 billion mark in December 2020.

These are small savers from as little as Sh1000 representing the broader economy and a wide range of aspiring individuals who lack the sophistication to invest in capital markets and so elect unit trust to do so on their behalf.

They are safe in that they diversify investment stocks, bonds, or other approved asset types, conduct regular audits, and have a fund manager, custodian, and a trustee licensed by the regulator.

Their growth has even seen the Capital Markets Authority (CMA) issue new guidelines seeking more disclosures, updated asset valuations, and limits on investments in different asset classes.

Unregulated digital lenders

Then they noticed as over 100 unregulated digital lenders flooded the market creating a lucrative business out of the blues from having 200,000 Kenyans borrowing money on their mobile phones in 2016 but that had grown to 2 million in 2019, a tenfold jump.

This offered an epiphany on the view of the Kenyan staring at his mobile phone.

They have been discovered by the betting firms and the loan shark, now investment firms are tapping into their small kitty breaking down complex products to fit their small budgets.

“Our journey in Chumz began when we observed that Kenya has numerous lending apps which are fuelling a consumerism culture and limited investment solutions. We set out to find why customers were not taking up investment options in our developing market and learnt three things; most people are unbanked or under-banked” Moneto chief executive officer, Samuel Njuguna said.

Companies have also been prepping experimenting with various products as they look for the right mix of solutions, testing mobile application interphase and identifying a catchy name to hook young Kenyans who spend more time of their lives on their mobile phones than anywhere else.

Daily savings scheme

In 2020, Nabo Capital, launched another Sh50 daily savings scheme that targeted Kenya’s 1.4 million boda boda riders.

It said the investment vehicle dubbed Uhuru Sovereign Trust Fund, would be accessible to the motorcycle operators via a premium text messaging service, which enables the riders to buy units via their mobile money wallets. The scheme's initial target is 100 riders from each county.

Members of the fund will see their savings attract an interest rate higher than that of bank deposits currently at 6.64 percent and the 364-day Treasury Bill which stands at 7.84 percent.

Safaricom which has been a front runner in the kadogo economy has been very successful for instance with their Lipa Mdogo Mdogo plan where qualifying customers can buy 4G-enabled smartphones and pay through daily instalments of Sh20 over 12 months.

Eligibility for the plan is based on a customer credit score and a history with the Safaricom network going back one year.