Technology

Getting tips for investment at the click of a button

kuza

Kuzamali.com offers a one-stop shop for comparison of financial services. FILE PHOTO | NMG

Charles Wamuti, after a 12-year stint in Australia, came back home excited at the prospects of making investments. To his dismay, there was not much information available online for comparison purposes to inform the savvy business development manager. That was in 2012.

Working in the banking and finance sector in Kenya, he came to the realisation that there was a gap in the investment segment for a one-stop comparison site. This was especially cumbersome for those in diaspora or without time to go to individual offices to collect information.

“Most people were stuck because they do not know what options are available. Banks are recruiting for diaspora but people in diaspora do not have a place where they can compare products and services,” said MrWamuti.

It was from this gap that he began building his website kuzamali.com to offer a one-stop shop for comparison of banking tariffs, returns on unit trusts, yield on bonds and bills and even loan and mortgage calculators, among other finance related investments.

Mr Wamuti says the website, which went live last August, was an avenue to appraise banks, while demystifying banking and investment.

“I wanted to get customers to dictate services and direction that they want to take with their money,” he said.

“We need to have more local investment and look at other investment vehicles available in the Kenyan market.”

Most investment vehicles are deemed a preserve of the elite and financial savvy, leaving the bulk of Kenyans with limited financial literacy to traditional investments such as chamas, land and other small opportunities.

This is the case despite the availability of a host of investment channels even with a few hundreds or thousands of shillings.

“When making an investment, the returns must always beat inflation,” he explains.

The only way to gauge this is to survey the options available in the market and using that to make an investment decision.

Whenever Mr Wamuti would have a conversation with his diaspora colleagues, there were several complaints on financial institutions or lack of investment opportunities locally, beyond stocks and land.

This was far from the reality as with over 40 banks in Kenya, products for diaspora units are competitive, with some lenders offering better service than others. This information however would require one to sift through all 40 individual bank websites just to get a feel of the market.

In addition to this, with the growing loan appetite in Kenya, few are aware or able to calculate the eventual cost of the loan.

This is especially the case for borrowers on mobile money platforms and those using digital loan services which promise a quick turnaround on the loan, but hidden in the fine print is the fact that the loans can cost as high as 170 per cent in terms of interest. This means the borrower will repay the loan nearly twice the amount that was taken.

With correct avenues for interest rate comparison, a user can get the best rates on loan to suit their needs at a cost acceptable to them as opposed to relying on the first available alternative. This is what Mr Wamuti wanted to address. He has included financial calculators for mortgages, loans, unit trust and investment compounding on his site.

Financial calculators are not new on the Kenyan market with portals including banking websites and calculator.co.ke allowing users to crunch numbers before committing to a loan or investments.

Calculator.co.ke has expanded the segment allowing users to go as far as to calculate taxes, insurance, as well as travel and health premiums.

Taxes include duty for importation of motor vehicle, NSSF pension contribution, Value added tax, Amazon, ebay, alibaba custom duty among others.

Tapping into technology and the digital era to avail data on the web has become a necessity for any economy that considers itself digital. According to Wamuti, all services and products are available online in Australia as this is the norm.

In the UK, comparison websites go as far as to show the price of a loaf of bread or packet of milk in the different retailers in the radius of the shopper.

The availability of such technology frees up the market, putting the control in a consumer’s hands rather than the provider, hence making the market competitive while boosting service delivery.

Kuzamali.com will finance itself through partnerships and agency with various players in the financial sector while also boosting traffic to benefit from advertising.

On the international front, websites such as bankrate.com are offering similar services including investing, comparisons, calculators and even advice and relevant articles on financial matters.