Monday, July 7, 2008
Investment Clubs pick up in Kenya
There are many unique and often laughable things about Kenyans but there is also a very serious and interesting set of attributes. In this post I take a look at a recent interesting phenomenon that reflects the growing awareness that Kenyans have with regards to investing, business and collective power.
The Business Daily recently had a piece about how 'chamas' or small social groups that would come together, make small monthly contributions and then individually borrow from the pool for personal projects have evolved into what can only be described as investment clubs.
One of the most famous is the Trans-Century group which consists of a bunch of 50+ age-group men who started their 'chama' over 20 years ago, formalised it about 10 years ago and now are Kenya's largest private equity fund. Last year they event went as far as institutionalising their operation and hiring a professional team of fund managers and analysts to manage and grow their portfolio.
Another, more recent group, with a much younger set of members (30+ age-group) and a seemingly more ambitious outlook is the Baraka Africa Fund, which was set up about two years ago and raised close to 80 Million shillings (US$ 1.3 Million) in it's first closing. Through regular monthly contributions from it's members, the Fund has continued to grow and was recently the talk of the town with the 570 Million (US$ 9.5 Million) takeover of City Finance Bank.
Besides these larger, better organised groups there are hundreds of small clubs that are investing in everything from shares on the Nairobi Stock Exchange to properties all over the country, transport business, credit and finance and many others.
This is a very exciting time as more Kenyans become aware of the power of capital.