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Post-Election Business Environment

Aug 6, 2017

On 8th August, 2017, Kenyans will take to their registered voting stations to elect their Government, in what will be Kenya’s 6th General Election since they adopted a multi-party system, and the 2nd General Election under The Constitution of Kenya, 2010. The Kenyan General Elections, 2017, is shaping to be a unique election for four main reasons: It has the highest number of contesting candidates at 16,259 compared to 12,400 in 2013, It is definitely the most hotly contested election in our history, so it raises the stakes, and from recent surveys, it is very closely contested, with the latest IPSOS polls placing Uhuru Kenyatta at 47% and Raila Odinga at 44%, and the latest Info track poll placing Uhuru Kenyatta at 48% and Raila Odinga at 48%, It is the most expensive election ever held with Kshs 49.9 bn expected to be expended by the electoral body, up from Kshs 35.0 bn in 2013, as per the Pre-Elect...

Ten Financial Planning Mistakes to Avoid

Jul 30, 2017

It is said that your financial situation is a combination of every financial decision you have made. While making mistakes is a part of life, some mistakes are more painful than others, more so the financial ones, and identifying what went wrong will help you avoid repeating the mistakes. In turn, this will greatly improve your financial situation and set you on the path to financial security. Below we identify the ten common financial planning mistakes that lead people into financial distress, and how to avoid them. We then conclude by identifying the key areas you need to focus on for correct financial planning, which will lead to wealth correction. Not Budgeting: If you don’t have a target, it is impossible to know if you have missed it and definitely failure to plan is planning to fail. Whether your budget takes the form of a complex spreadsheet or a piece of paper it does not matter, but it is important to measure actual expe...

Update on Effect of Interest Rate Cap on Credit Growth & Cost

Jul 23, 2017

Two recent events have led us to revisit the topic of the effect of the interest rate caps on credit growth and costs: First, the Kenya Bankers Association (KBA) and the Central Bank (CBK) made public a Cost of Credit website in which commercial banks and micro-finance institutions are required to publish their true cost of credit, which revealed that the average true cost of credit is at 16.7%, and is as high as 20.6%, which is way above the statutory limit of 14.0%, based on the interest rate cap legislation that limit the lending rate to 4.0% above the Central Bank Rate (CBR), and, CBK came out this week and set out new regulations that will see commercial banks incur heavy penalties, of up to a maximum of Kshs 20.0 mn, from Kshs 5.0 mn previously, for failure to disclose the true cost of credit to consumers. Given that it is now almost a year since the legislation, this write up...

Kenya Economic Review

Jul 16, 2017

Introduction There has been a couple of reports and statics that have been released which provide investors and business decision makers with insights on economic stability, growth and progression. This week, we seek to review the performance of economic environment in Kenya and take a view as to the likely direction of the country’s economic performance. The upcoming general elections have been at the centre stage of influencing trends in economic activity in recent past. Political stability has complimented the economic stability of the country and infrastructural spending has supported growth of the economy with developments such as the Standard Gauge Railway being launched in June this year. Below, we discuss some of the key themes that have shaped the economic environment in Kenya. GDP Growth The country’s GDP growth for Q1’2017 came in at 4.7%, lower than 5.9% in the same period in 2016. The decli...

10 Key Steps to Financial Security

Jul 10, 2017

Living a fulfilling life is important for everyone. For one to do so, planning all of the five key pillars of life, namely; (i) health & well-being, (ii) religion or spirituality, (iii) friends, family & community, (iv) learning & knowledge, and (v) financial security, is a must. Financial planning is the road that leads to financial security. So how can you tell that you are working towards financial security, where you are able to meet your life goals through proper management of your finances? Individuals are different in various aspects such as age, income level, future plans and lifestyle, just to mention a few, hence each plan is different. However, here are 10 things to do to attain the financial security we all look forward to: Invest before you spend: Your monthly consumption should be equal to your income (net of all taxes) minus your monthly investments. Regular investment every month grows your wealth, so your money is makin...