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Recent Topicals

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Kenya Cost of Credit

Feb 6, 2022

According to the Central Bank of Kenya (CBK), the private sector credit growth declined in 2021 coming in at an average of 7.8%, in comparison to the 8.0% recorded in 2020 partly due to the cautious lending strategy adopted by banks during the COVID-19 operating environment. High cost of credit remains one of the main challenges that hinders credit growth with the big banks charging a higher cost of credit in comparison to smaller banks reflecting their strong pricing power based on a wide distribution network, multiple services and well established brands. On the other hand, small banks have to compete for customers by offering relatively cheaper credit in order to grow their loan book. According to the Kenya Bankers Association cost of credit calculator, ABSA Bank topped the list of most expensive banks charging a total of Kshs...

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Unit Trust Funds Performance, Q3'2021

Jan 30, 2022

Unit Trust Funds (UTFs) are Collective Investment Schemes that pool funds from different investors and are managed by professional fund managers. The fund managers invest the pooled funds in a portfolio of securities with the aim of generating returns to meet the specific objectives of the fund. Following the release of the Capital Markets Authority (CMA) Quarterly Statistical Bulletin – Q4’2021, we analyze the performance of Unit Trust Funds, as the total Assets Under Management (AUM) have been steadily increasing and they are among the most popular investment options in the Kenyan market. We will further analyze the performance of Money Market Funds, a product under Unit Trust Funds. In our previous focus on Unit Trust Funds, we...

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Off Plan Real Estate Investing

Jan 16, 2022

The concept of off plan buying has continued to gain traction over the years driven by the challenging financing environment for both the developers and the end buyer. Buying off-plan is a great way to purchase a property below its actual market value, which makes it a great investment opportunity. For investors, most are attracted to off-plan buying due to the promise of property appreciation. Developers on the other hand prefer off plan investments since they consider it an alternative source of financing mainly because of the capital intensive nature of Real Estate Projects This week we seek to provide an in-depth assessment of the concept of off plan investments in the Real Estate sector to provide a basis for the justification of the concept. As such, we shall discuss the following: Introduction to Off Plan Investing, Overview of the Off Plan Buying Process and Investing Tips one should consider, A...

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Affordable Housing in the Nairobi Metropolitan Area (NMA)

Jan 9, 2022

In 2017, the President, H.E Uhuru Kenyatta launched the Affordable Housing programme as one of the key pillars of the ‘Big Four Agenda’. The government had planned to deliver 500,000 by 2022 and with the president’s five-year term almost coming to a close, the government is already far out of reach since only about 1,000 units have been delivered through the Pangani and Park Road Ngara projects. Even before the onset of the COVID-19 pandemic, the government had no sustainable plan on how to fund the initiative despite increasing its budgetary allocation by 75.0% to Kshs 10.5 bn in FY’2019/20, from Kshs 6.0 bn in FY’2018/19.  We

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Kenya Macro Economic Review

Jan 2, 2022

Economic Growth: During the first half of the year, the economy recorded an average growth of 5.4% growth, 10.1% growth recorded in Q2’2021 and the 0.7% growth recorded in Q1’2021, an increase from the 0.2% contraction recorded in H1’2020. The expansion was largely driven by growth in the transport and the accommodation and food sectors which recorded growth of 16.9% and 9.1%, respectively, in Q2’2021, compared to the contraction of 16.8% and 56.6%, recorded in Q2’2020. The growth in these sectors follow the ease of COVID-19 travel restrictions and lift of the dawn to dusk curfew that was put in place since March 2020. Notably, the agricultural sector recorded a decline of 0.9% in Q2’2021, compared to a 4.9% growth in Q2’2020 and a 0.1% contraction in Q1’2021. The contraction during the quarters is mainly attributable to unfavorable weather conditions witnessed during the period. For more information, see our

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