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Investing

Kenya Ranked 5th as Investment-friendly Environment in Africa

Inversk Review

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The Africa Risk-Reward Index which ranked 26 African countries based on investment potential awarded Kenya 6.27 points out of 10 earning it the fifth position out of the total.

Ethiopia tops the rewards sub-index, with eight points, followed by Egypt (6.7), Ivory Coast (6.6) and Tanzania (6.3). Ethiopia’s high reward score is attributed, largely, to its huge market of 100 million people, and also the process of liberalizing various sectors such as telecommunications, aviation and financial services.

The Africa Risk-Reward Index is made up of two strongholds which include rewards and risks. The rewards are tested on four precise bases including economic growth forecasts economic size, structure and demographics.

Among them all, economic growth outlook carries the heaviest weight in the reward score, as this is a major factor influencing any investment opportunities.

Kenya’s splendid performance is linked to the efforts to take full advantage of opportunities granted by the East African Community (EAC) by pushing for the removal of tariff and non-tariff barriers to trade, as well as pitching for free movement within the region, which was announced by the President, Uhuru Kenyatta, while addressing the 42nd General Council of the Organization of African Trade Union Unity (Oatuu)

On the downside, Kenya is ranked as the 16th most risky place to invest in whereas the Democratic Republic of Congo (DRC) takes the lead in that sect with an eight out of 10 score.In contrast, Mauritius is regarded as the safest.

In the East African Community, Kenya comes in second after Tanzania. This is because, Tanzania performs better than Kenya when it comes to political stability.

“Unlike Kenya, where ethno-regional tensions produce cyclical instability around elections, political stability risks in Tanzania are low in light of broader social cohesion under the ruling Chama Cha Mapinduzi party,” says the report.

The challenges that Tanzania bares are her protectionist attitude towards her neighbors, highlighting occasional blockages of goods from other EAC countries, as well as President John Magufuli’s nationalist stances on the extractives sector.

Kenya came third in the EAC after Tanzania and Uganda. Rwanda has been ranked to have the least risk in the region. According to the World Bank, it has been hailed for improvements in government bureaucracy and reforms that encourage international investment. It is also the highest-ranked country in the bloc on ease of doing business.

Nigeria, Morocco, South Africa, Algeria and Angola are some of the countries that were outdone by Kenya despite being perceived as countries with larger economies by the 2018 Gross Domestic Product value data from World Bank.

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Funding and Raising Capital

100 Women To Win Funding of Up to $85,000 from Invest2Impact Competition

The competition is set to start on July 11 and end on November 13.

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100 women entrepreneurs from Kenya, Uganda, Tanzania, Rwanda and Ethiopia are set to get funding to the tune of up to $85,000 from a funding competition dubbed Invest2Impact.

Invest2Impact, an initiative from Graça Machel Trust in partnership with FinDev Canada and other finance institutions from the U.K., will see women from each of the participating countries compete for the fund. Only 20 women will be selected from each country.

The initiative was launched on Thursday at an event in Nairobi, Kenya where Graça Machel has visited tghe country to amplify women-led businesses.

Speaking during the event, Graca noted that the decision to focus on women entrepreneurs was made because of the significant contribution that they make to their economies.

“Empower a woman and a whole community will thrive, empowering women benefits everyone and is essential for communities to thrive. Research shows that increasing women’s involvement leads to improved financial management and more sustainable, thriving communities,” she said.

When women-led enterprises are empowered to achieve their full growth potential, they contribute to more job creation, enhanced regional trade, and spur more activity among budding entrepreneurs.

“Through our numerous engagements with women across the continent at the GraçaMachel Trust, we have witnessed the rise of African women who are not content running businesses for subsistence purposes only.

“Some are venturing into sectors that are traditionally male-dominated where their numbers are still small; some are bent on improving their technical knowledge and capacity to tackle even greater challenges impacting the business landscape; and some are engaging in regional trade to maximise their growth potential. The female segment cannot be generalised as ‘niche’ or ‘predictable’,” Mrs. Machel said.

Businesses whose focus are aligned with the UN Sustainable Development Goals; seeking to reduce poverty, increase access to health and education services, reduce hunger and increase food security, promote gender equity, create decent working conditions for their employees and spur economic growth, have a greater chance of being considered for the funding.

Participating women will also benefit with business development services, mentorship programs, new networks and business visibility through partnerships.

To qualify, a business must be led by a woman or women owning at least half of the share-holding and have assets or revenues in excess of $50,000 (Sh5 million). The business must also have been in operation for at least three years and a minimum of five employees.

The Invest2Impact will categorize participants into four “tracks”: 2Xcelerate, 2Xcrowd, 2Xcapital and 2Xcatalyse.

25 finalists will compete for cash prizes of Ksh.8,749,900 ($85,000), recognition at a gala winner’s event and participation in the Invest2Impact funding readiness program.

For the 2Xcrowd track, 25 businesses will receive customized, tailored support and mentorship to implement an Africa or global crowdfunding strategy.

2Xcapital will see 25 applicants who are selected from the Invest2Impact participants benefit from access to funding programs. It is targeting smaller businesses that seek funding less than Ksh.308,700,000 ($3million).

In the final category, 2Xcatalyse, 25 female entrepreneurs will be selected to attend a major international expo, conference or event in their industry sector with sponsored travel, attendance fees and promotional material.

The Invest2Impact competition which will be on an online application portal will open to the public on Monday July 18 and will remain open to applicants for two months.

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Finance

Money Mindset That Is Holding You From Starting A Business

Inversk Review

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Never be deceived that business is just started without capital. Practically a business needs finance and that is why capital is always a necessity. However, this can never be a stumbling block to starting your business. What you need most is that business idea and the execution follows afterwards.

The plan you have in your mind can turn into a multi-million business. This happens the moment you are aggressive and ready to conquer the impossibilities in life. All the successful businesses thriving today started with humble beginnings. I have never heard of a business mogul who said that his business started today and was trading with an ISO the day after. Patience has been a key attribute to success.

Having a brilliant idea you will never lack an investor. The business men you see living lavishly tend to seek for ideas that will make their businesses grow. The moment you will unchain your mind from the concept of having enough money to start business that will be the beginning of your success.

The youths are the best people in targeting the entrepreneurial sector; this is because the future belongs to them. Money will never be enough to mankind. This concept needs to sink in you and sprout out the idea that you need to start with what you have. Money may be a necessity in starting the business but the first can in business is through marketing your idea to the potential buyers. That idea you feel can generate profit can be turned to be the next ‘amazon’ or ‘apple’ business on the world. If you ask Donald Trump how he built his brand in the market, he will tell you the small dollars he was offered by his dad then he dived into business.

That’s the way to go in the cooperate world. Use what you have at had to make sure you achieve what you want in life. Failure is the fear of many business oriented minds. Just you know, failure is a positive factor in business. The concepts of failing as much as you are in business one has to ready to embrace it. Failure in business means that you are heading somewhere and there are things that need to be addressed. It shows you the way to go needs to be the other way and not the way you are used to be doing things.

Nobody prepares to fail but we must know how to tackle it. The more we fail and start again the more we move closer to our goals. This not only applies to business alone but also in real life. Never be discouraged by failure take it as a challenge and handle it head on. It will be there but remember it is not there to stay. It is part of success. The CEO of Optiven Group Mr George Wachiuri in a past interview with Inversk magazine attributed his success to how many times he had failed.

Most of the people who want to be millionaires have the fear of failing. They have never look at the other positive side of failure. Money can never be the stumbling block to deny you the chance of being the next Bill Gates.  Market your idea since it is the only money you have in mind. I happened to participate in a World Bank blog and the person who won it was a gentleman namely Jeremy Riro who had a brilliant. Just from humble beginnings he was rising with the idea of Agribusiness to be inculcated in our youths today in Africa. If Riro let the opportunity slip saying he had no money word bank would never have his idea.

His idea is yet to be executed and the employment is going to be created to many jobless youths. Marketing our idea with a will always remains an effective way rather than waiting for that day we will have money to execute the plan. That idea you have kept for long awake it and continue with the adventure of making it a better business idea. If you don’t have any well you have not yet started living because the moment you start dreaming is the day you started living.    

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Investing

Complete Guide to Investing in the Stock Market

Henry Ozianyi

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Studies reveal that employment income is no longer able to keep up with the lifestyle demands of the current fast paced increasingly digital lives. A huge percentage of employees feel squeezed and unable to go through a month without money issues. To maintain a decent lifestyle, it has become almost mandatory for one to have a second income generating plan. Most people result to working longer hours or begin side hustles, which eventually prove to be quite counterproductive.

As a fresh graduate, you can do yourself a favor to avoid this rut by simply investing to earn passively. These are incomes that don’t warrant for your much involvement. Investment income, copyright income, patent income, leases, mining rights can all be termed as passive. They involve a onetime big effort then very minimum involvement required later.

In this article, we explore one of the ways of raising investment income; which is investing on the stock market.

In a small survey I carried out, I sought to find out how many young people in my class knew the location of the Nairobi Securities Exchange (NSE). Only a few raised their hands.

Does it really matter? No, it doesn’t; but it is a good barometer of the investment knowledge individuals have. If you are going to participate in this market, it is important you know where it is, whether physically or digitally. Then you need to understand what is bought and sold in this market, as well as understand the language so that you are able to intelligently communicate.

Essentially, a stock market facilitates the buying and selling of bonds, shares and their related derivatives such as Mutual funds and exchange traded funds (ETFs), options and futures. Real Estate Investment Trusts (REIT) is a Real Estate instrument tradable on the stock exchange too.

Bonds refer to fixed income securities premised on debt. When you buy a bond, you are lending either the government or the corporate entity that issued the bond. The risk is relatively low and in fact when you lend to a stable government it is risk free. In the two five four, the returns on debt securities averages to 12%-15%.

Stocks accord you the right to own part of a company and receive dividends and or bear losses as allocated by the company. The income from stocks is highly variable, day after day. Compared to bonds, equities apart from providing variable incomes also provide capital appreciation or depreciation in form of an increase or reduction in the market value of the shares.

Mutual funds, ETFs, futures and options are all derivatives of the basic bond and shares. Mutual funds and ETF’s are essentially pooling your resources with other investors which is then invested in a combination of bonds and stocks and professionally managed for you while futures and options are contracts to buy and sell at future pre-determined prices.

Now that you know what you can invest in on the stock market, you need to establish how much money you should invest to achieve your financial goals, noting your current expenditure and your earnings potential:

 A budget should be your starting point.

In it, allocate your living funds and your investment funds. Your ultimate aim is to ensure that your passive income replaces your active income, and then you can retire from active employment.

How are you going to do the investment?

Once you have determined your budget and chosen the investments to buy into. Are you going to do it alone, walking to the stock exchange or are you going to hire a broker, or a financial consultant? It is important to note that the costs vary with each choice. Costs associated with investments include brokerage fees, commissions; stamp duty, withholding taxes etc.

To buy bonds and shares on the stock market, the investor would need to open an account with a local stockbroker or bank that will in turn open a Central Depository and Settlement Corporation (CDSC) account for them. The CDSC account is where all tradable shares are held electronically. You then send money and instruction on what and how much of bond or share the stockbroker or bank should purchase for you. In case of bonds, an individual can also buy directly from the central bank.

Investing is a personal endeavor which guarantees you extra income while you are still working or the only income during your retirement.

There is no one size fit all solution when it comes to investments. Explore as many alternatives as possible. Have a mix of shares, bonds, Real estate etc. and keep re-jigging this portfolio to maximize on returns, while minimizing your risk. The concept of interest compounding favors the young, as it converts time into money for you, therefore take advantage and start investing now.

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