Kenya: Firms competing to boost digital savings, investments

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  • Kenya has the lowest saving and investing rate at 14 per cent among the top economies in East Africa with Tanzania at 36 per cent and Uganda at 22 per cent
  • The country has seen three firms launch digital savings and investment platforms since the start of 2022, giving banks a run for their money
  • The mobile apps seek to pioneer saving and investing flexibility, life goals creation and tracking, market interest rates, financial visibility, and expert support

Competition for digital savings and investment platforms is growing in the Kenyan space as more companies eye the lucrative market. 

The country has seen three firms launch digital savings and investment platforms since the start of 2022, giving banks a run for their money. 

Montero Ventures and Nabo Capital on Tuesday launched an app to help Kenyans save more and meet their financial goals.

Read: Sage gives tips on how SME’s can save Money for challenging times

The App dubbed Chumz will see customers save as little as Sh5 as well as create savings goals as an individual or with a group. 

The app will send prompts to the user to invest towards their goal and offer advice on investing based on spending habits, with its 52-week savings challenge among other features. 

“You can also invest with family and friends as well as making use of behavioural psychology practices such as social nudges, default bias, and self-commitment to bridge the gap between intention and action,” Montero CEO Samuel Njuguna said.

All the cash accumulated from individuals’ savings will be Invested by Nabo Capital. Chumz is registered with Capital Markets Authority(CMA).

“Through Chumz, we will enable Kenyans to achieve any aspiration including education, travel, home-ownership, and so on. Our partnership is grounded on one desire: to democratize investment by giving people access to opportunities with competitive returns,” Nabo Capital Managing Director Pius Muchiri said. 

Kenya has about 200,000 active investment accounts in the capital markets compared to over 34 million active bank accounts and an estimated 300, 000 investment groups. 

The app will be available for download from Google Play and Apple App Stores.

Read more: Saving Discipline- What Saving Tips Are There?

Edith Chumba – Head of Corporate and Institutional Banking SCB, Kagwe Mungai – Brand Ambassador, SC Shilingi Funds and Mark Mulatya – Chief Operating Officer at Sanlam Investments East Africa Limited pose for a photo during the launch of the SC Shilingi Funds at Standard Chartered Bank Offices/ COURTESY

Meanwhile, Standard Chartered Bank Kenya also launched SC Shilingi Funds, a low-ticket money markets fund proposition on Tuesday in partnership with Sanlam Investments East Africa Ltd (Sanlam).

The fund has been integrated into the SC Mobile app and will see interested customers invest as low as Sh1,000, and then earn competitive interests.

Customers are also allowed to withdraw their money at any time.

The product that is 100 per cent digital and available 24/7 on the said app, will enable one to move money from their current account daily, weekly, or monthly to the Money Market Fund managed by Sanlam.

Interestingly, savings and investment platform Cashlet should be going live in the next couple of weeks.

The app aims to push the savings culture among Kenyans and has received the necessary approvals from the CMA. 

Cashlet has been developed by Sycamore Capital Ltd, and it works in partnership with regulated fund managers in Kenya, to allow users to invest in unit trust products in simple, fully digital, and modern way.

The initial partner fund managers include ICEA Lion Asset Management, Old Mutual, and Genghis Capital.

The app seeks to pioneer saving and investing flexibility, life goals creation and tracking, market interest rates, financial visibility, and expert support.

“Our mission is to help people invest, manage and grow their money in the simplest way possible. Most industries in Kenya have been transformed by the power of technology and mobile apps. Unfortunately, the personal finance industry, including savings and investing space, has been left behind and we are looking to change this together with our partners. We want to uberize the space” Cashlet Co-founder Kwaku Foh said.

The move comes even as the sector is experiencing fraudulent cases, forcing investors to take a step back.  

Kenyans have been swindled by unregulated fund managers who trick them to take a shorter route to riches but end up regretting dearly after losing millions and sometimes billions of shillings. 

In 2020, the Capital Markets Authority(CMA) warned investors dealing with unlicensed entities that they will not get its protection.

The Authority advised investors to confirm the licensing status of any firms offering services in the capital markets industry with the Authority.

‘’Investors who invest in unregulated and unapproved entities risk loss of their investments with no recourse afforded to them under the capital markets regulatory framework,” CMA Acting Chief Executive Wyckliffe Shamiah said. 

Kenya has the lowest saving and investing rate at 14 per cent among the top economies in East Africa with Tanzania at 36 per cent and Uganda at 22 per cent.

Read: Vodacom Tanzania pioneers M-Kopa for savings groups

Kanyali Cynthia is a Kenyan-based financial journalist with key specialisation in data and tech reporting and over eight years of experience.

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