kenya-investment
Finance

Tevat: Tech portal helps ordinary Kenyans invest

Many investment sectors have proved difficult for ordinary low-income earners in Kenya to enter with small-scale groups, locally known as chamas, being the traditional way of pooling resources together. However, these have not been without their problems. We catch up with the CEO of Tevat LLP, a tech initiative that pools resources for both individuals and chamas, to find out how technology might be able to help.

“The idea behind any chama,” says Waweru Nderitu, Tevat CEO, “is for members to contribute relatively small amounts [of money] over a period of time. But banks give them interest of less than 2% on their savings because of the very fact that they deposit relatively small amounts at a time.”

“With this in mind, chamas are brought together where the small monthly contributions of one chama gets pooled with small monthly contributions of many other chamas,” he continues. “In this way, chamas are getting up to 14% interest on monthly contribution making them more productive.”

The Tevat technology

The tech behind this initiative is an online financial and project portal where the investor registers to participate in any active projects. Through the portal, potential investors are able to make contributions towards whatever projects he or she is interested in.

The active projects are listed and every registered member can participate for returns on a pro-rata basis.

According to Nderitu, the aim “is to pool resources together and save collectively as one unit. If they [individuals and small scale groups] can have a platform that brings them together, allowing them to pool resources and save together then, and only then, can they get a large enough account to negotiate with”.

As Nairobi Securities Exchange (NSE) notes, “for an economy to grow, money needs to shift from less to more productive activities;  idle money and savings should be invested in productive activity for the economy to grow”. This is the direction that the Tevat initiative takes.

It is estimated that Kenya has $3.5 billion lying idle (un-invested) in the hands of individuals and chamas. This money can be utilized for economic growth with pooling technology.  With this in mind, more and more low-income earners are enjoying slices of the economic cake by using the online app to pool and invest.

Investors are also given an added advantage explains Nderitu: “We have partnerships with financial institutions and real estate players so for those looking to invest in real estate we give them access to financing at cheaper rates so that they can achieve their goals faster”.

The Kenyan funding scene

Kenya, like other developing economies is riddled with lack of funding. However, the problem may not be “where” but “how”. This is because with the scarcity of land, home and other assets, bootstrapping as a source of funding is out of question.

Rosemary Peavler explains that “Even with the best business plan, you may not be able to convince a bank to loan any of their money for credit for brand new business”.

This is especially true in Kenya. The use of schemes like the UK’s Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) is still a dream. And for a developing economy there are many more pressing priorities like education and health, poverty and crime.

The funding business is also largely a private sector affair. Private sector funding may not be easily accessible to the majority of low-income earners with no securities.

In addition to the existing online portal, online management software that will allow clients to transact online with ease is in the offing. Account top ups, statement requests, financial planning and chama management will all be available online.

“Such are the simple solutions we need to bring market efficiency to consumers allowing them to be more productive,” Nderitu concludes.

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Daniel Muraga

Daniel Muraga is an experienced online writer and communications professional based in Kenya.

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