With limited research it’s difficult to establish the phenomenon of investment clubs both at home and in the diasporas. A good example of the clubs being referred here is the Tran century group. In the UK and US I have come across well-established groups such as Ubuntu, KCIG, ACP.
The idea of an investment club is borne from the need to pool resources, learn, minimise risk, maximise returns, networking and exchange ideas. Illustratively, the idea is widespread in the UK and there is a large number of clubs that have come together.
Despite the awareness within the Kenyans in UK, the concept has not translated into reality although the benefits outweigh the risks and would enrich individuals and the community disposal income.
From research, various barriers have emerged as to why this is the case.
Amongst them, include;
· Immigration issues
· Mistrust-supposedly this is informed by past experiences
· Fear of unknown
· Individual short term goals
· After quick money or short cuts hence the rush to the illegal pyramid schemes despite the risks involved
· Tribalism which is prevalent even in the Diaspora
· Ignorance
· Cultural practice- many assume there is job security in the west. Whilst advertisement and latest trends lure others more so the younger generation into spend now, save later lifestyle common in the west. In some instances, people have questioned the rationale of spending 2 to 3 hours researching or even sitting down in a club meeting.
· Commitments phobias-there are those that I have spoken to who are afraid to come together in a long term deal instead preferring loose partnerships.
Regardless of these barriers, coming together as either a group of friends or family vis-à-vis with unknown or strangers both have their pros and cons. Nonetheless, with both experiences, the latter is more advantageous than the former in terms of; professionalism, diversity, values, boundaries, contacts, educational opportunity, decision making, rationality, influence, skills, operations, management etcetera. Some disadvantages may include; egos getting on the way, lack of commitment, hidden agendas, bonding take longer, it also takes longer finding or identifying like-minded individuals.
Therefore with this in mind the question is, what will take to break these barriers and can Kenyans as with other communities (Chinese/Indians/Nigerians) come together.
6 comments:
We started a chama this year with guys of my graduating class here in Kenya. We figured that one year down the line, guys had found jobs in diverse sectors of the economy (audit, telcoms, manufacturing, ISP etc) and that we could tap into that knowledge base by forming a group that will collect a sum of money every month and invest it while waiting for the time one of us gets a killer idea. The essence is a long term payoff for members in that there's bound to be one sector where a killer idea exists and will be found during our time. Though surprisingly some former classmates haven't bought that line of thinking. I think that separates issues such as tribal, selfish ideas etc but I might be wrong?
you have hit it when it comes to patience. most Kenyans dont have it. i have also been told that these clubs work well only if the membership is diverse and when the common goal is investment. it doesnt mean that if you are friends you can make headway as far as investments are concerned.
I was inspired by the Trans Century article. For people who would not normally go out of their way to invest, this is a good idea. But for a seasoned investor like myself, I would prefer pooling my money with other people and investing in anything else but stocks, unless we plan on taking over a company.
Mwajsd: Groups will always have issues because of the different personalities. As long as you have clearly defined what you want to achieve, how and when you will achieve it and cover off as many of the what ifs as you can, these other issues become side issues.
Od: You said it. While many Kenyans work very hard to please their employers, they don't and are unwilling to bring the same mentality to achieving their investment goals on an individual basis and even less in a group context.
Ssem:Finding others at that level is difficult and for most (even TC), its easier to start small and build up aggressively.
Maina, for those who don't need encouragement, moral support or are good at picking stocks then you could also invest in other things. Personally I'm interested in RE, businesses or other high priced investments which I can not afford on my own.
Hi Maina,
I saw your article/letter on the Business Daily last week, I think on Thursday.
To keep it to the point: it was inspiring!
I am interested to know what your main challenges have been as a Group growing together, especially... away from home; how often do you meet (and how many areyou are in that regard?); also, what investments do you fancy frm Africa?
I also followed the blog link from the n/w pp..
Its a wealth of info, mann! What astounds me is how you get to know so much from way over there..? The list of Investment Groups you've listed in your site have also offered me some pleasant insights.
Kudos for your letter!
Vitalis Ojode,
vitalojode@yahoo.com
Naks, Kenya
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