Trio bets on Web platform to spread financial literacy

You can be excused for thinking that Valuraha is a tweaked version of the words Value and Raha — which means happiness in Kiswahili — and that the three youths behind the web-based platform coined the phrase to reach out to their peers.

Valuraha, however, has its origins in northern Europe; it is Estonian to be exact and means smart money.

The entrepreneurial trio; Wangechi Mwangi, Betty Mutimba and Kinyanjui Njoroge — apart from being students at Strathmore University — share a passion for finance which was among the reasons they sought to create financial literacy through the platform last May.

“I have always dreamt of starting my own business empire centred on intelligent systems ever since I was in high school. I called it smart money so I played around with Google translate to make it sound cool. When we began this venture Wangechi and Kinyanjui loved it and that’s how the name stuck,” said Ms Mutimba.

The fact that Mutimba and Kinyanjui are fourth year students while Wangechi is in second year has not stopped them from building on their venture which is housed at the IbizAfrica Africa incubator.

The students are pursuing undergraduate degrees in Business Information Technology while Kinyanjui is majoring in Informatics.

Different fields

“If all of us weren’t in technology we would be in finance, we chose technology because it is not really a stand-alone — it blends into many different fields. For us the field we chose to accelerate is finance because it is our common interest,” said Ms Mwangi.

The vision of Valuraha is to open up finance to people who do not know much about the sector, targeting them with the right knowledge and practical skills in order to help them become wealth creators.

“Many people believe that the sector is a club for the elite because of the wrong perception that the entry barrier is beyond them. Yet one could easily pool resources with fellow peers and plough it in the securities market or fixed income market. They fail to realise that they have a network which when combined can make things happen,” Ms Kinyanjui explained.

In line with this vision, the web-based platform has created a replica of financial markets; complete with a live feed from the Nairobi Securities Exchange that enables one to trade with virtual money while interacting with live market data.

“Some of the students studying actuarial science and finance can be able to grow portfolios on paper theoretically, but if you give them the money and ask them to help you buy shares and make money for you practically they would not know where to start,” said Ms Mwangi.

In order to participate in the education platform, one has to register at a fee, which enables them to join a public or closed league where they can compete with their peers to see how one can grow a big portfolio and make the most profit in a limited period of either a month, three months or half a year.

The registration fee is set at Sh1,000 for the public, membership is renewed annually at a similar amount.

“We mimic the real world scenario and give it to you to enable you to understand it.

Hopefully, from trading with virtual money in a few months, you can be able to transition from using virtual money to actual money. We really see ourselves shaking up this industry just by virtue of education,” Ms Wangechi said.

The trio has also integrated knowledge of bonds, treasury bills and unit trusts for people to interact with and learn from. They are also seeking information from banks on opportunities that exists in fixed deposits and mortgages.

Their key focus is students mainly in high school because they aim to create financial literacy from an early age.

Among some of the targeted schools are Lukenya, Rusinga and Brookhouse. Their business model elaborates how Valuraha can make money by charging students on a termly basis, allowing them access to their platform during school holidays in order to enable them pay for their feeds in addition to meeting costs of sustaining the site.

The trio is also willing to partner with institutions of higher learning to create customised platforms through which their students can run leagues.

“From Valuraha members of the public get to understand market dynamics well and at their own pace without the risk of losing their money on a bad decision until they are confident enough to trade in real life, while students get to gain practical experience and not just learn abstract concepts,” Ms Mutimba said.

Valuraha’s nine-month old journey has not been easy. The trio admits having grappled with the challenges of a startup while working to maintain good grades in their academics.

“We faced a lot of challenges in getting and securing the live NSE feed which provides information on what is happening on the exchange as well as securing strategic partnerships,” Mr Kinyanjui said.

“We did our first pilot scheme with about 10 students from the Strathmore School of Finance and Applied Economics.

‘‘They validated the need for added practicality in business, finance and economics courses with their constant engagement on the platform competing to beat each other’s net worth.

‘‘They also gave us plenty of technical feedback because we began the pilot as soon as the platform was minimally functional and not too pretty to look at,” said Ms Mutimba.

The three are constantly working to improve the platform.

They work closely with the incubator and faculty members in order to validate their business model and identify the best strategies to sustain the venture.

“Two years from now we look forward to having a bi-annual event that will test the research, financial and economic understanding of students since we plan to have rolled out in 150 schools and 20 tertiary institutions,” said Mr Kinyanjui.