CMA woos rural folk to increase investment in capital markets

Capital Markets Authority (CMA) says only 10 per cent of adult Kenyans have an active investment profile in the capital markets, a fact they intend to change through countrywide education campaign.

Samuel Kamunyu, the investor education manager, says the percentage is much smaller outside Nairobi.

“There is a general misconception about the capital markets — that only rich people can invest and get returns — and we plan to change this perception,” he said.

“We are telling Kenyans that they don’t have to be rich or live in the capital city to invest.”

The minimum number of shares that can be bought at the NSE is 100 while some shares sell for as low as Sh5 a unit, he explained, adding that the rural folk are stuck in traditional investments, including land, farming, or banking excess income.

An increasing number of investors is going into real estate, cashing in on the shortage of housing especially in the urban areas.

Substantive returns

“Instead of keeping your pension or savings in the bank, invest in bonds or a collective investment scheme and when the right time comes you can get the principal with substantive returns,” he said in Kisumu.

Banks have diversified and decentralised services to include investment consulting and the rural community does not have to travel long distances to consult a stock broker.

Mr Kamunyu was speaking with the business community from Kisumu County at an investment forum.

Participants said that “the greatest hindrance” to investing in the capital markets was lack of information on where and how to invest surplus income.

Fear of unknown

According to Mr Antony Kwache, the chairman of the Kisumu Informal Traders Association, there has been a lack of clear information of how the equity markets operate and this fear of the unknown deters potential investors.

“There is a lot of money flowing throughout the counties, for example through informal investment schemes popularly known as ‘chamas’ and small co-operative societies,” he said.

“We hope that with adequate information, we can have some of this money channelled into our capital markets and stimulate growth in the country’s corporate world,” he said.