Are you searching for how and where you can invest and save money?
Here are the best investment opportunities in Kenya.
A Lot of individuals seek business opportunities and a chance to invest that is driven with high demand or contain the most profitable returns. There are numerous opportunities that can yield a high return as self-employed individuals. The market is rewarding, you just need to do some thorough research and analyse the numerous ways to invest or start a business venture. An investment if done correctly can enable you to become financially stronger. One should take enough time and plan accordingly before exploring the investment opportunities that are available.
Depending on the term, risk profile or return on investment there are a variety of investment options to choose from. Some investments are simple while others are more private or complex. The decision on where to invest your money should be based on your financial position, your understanding and knowledge of the market, having future goals or targets in mind and the consideration of all risk factors that come along with the investment opportunity. There are a number of opportunities available for investment in the different sectors of the Kenyan economy.
Real estate is an excellent investment option, however owning a property today is an uphill task. Kenya has witnessed an increase in its population growth over the years. This has led to a demand for housing units and the increase of residential property values in the year of 2019. Instead of purchasing a property outright, an individual can invest in the real estate market through a Real Estate Investment Trusts (REITs).
You can invest in REITs with a sum lower than what is required to buy a piece of property. The REITs shares are traded on the major stock exchanges which make them easy to buy and sell. The buying of REITs shares involves purchasing a portfolio of properties or mortgages and not a single property. Investors can enjoy higher capital gains since REITs tend to be held for an extended period of time. You can also exit your investment depending on the term of the REITs.
The Nairobi Stock Exchange (NSE) is where the public can invest in financial products. The financial products that you can invest in include Bonds, Shares, REITs, ETFs, Derivatives and other financial products. Each type of financial instrument contains its own risk. You can invest in NSE through licensed stockbrokers and investment banks. The best time to buy the cheap stock is during an IPO (Initial Public Offering). You need to understand fully how each financial instrument works before investing, as they are always subject to market risk. In order to invest in shares you need to open a CDSC account from any bank or stock brokerage company. You can access your CDSC account at any time, this helps to monitor stock movements.
A Mutual Fund combines investments from different corporations and individuals to form joint investments. It is a pool of money collected from several investors. Parties to the financial contributions share in the fund’s losses and profits. Mutual Funds are large in size and they are regulated by the government. A single investor in a mutual fund is referred to as a unit holder. The units are based on the amount that is invested in the unit fund trust.
The fund is managed by an accredited Fund Manager or company, who makes all investment choices on behalf of the investors. Mutual Funds consist of two types that include open-ended or close-ended mutual funds. In an open-ended mutual fund you can buy or sell units at any time, with the price of the units depending on the market values. In a close-ended mutual fund, an investor is required to commit their money for a certain period and they cannot withdraw their money before the maturity date without incurring a loss. There is also a money market fund that does not involve the initial management fee, your capital is guaranteed when you invest in the money market.
Government or Private Sector Bonds
Bonds are simply ways in which the government or corporations borrow money from the public to fund projects or run the government.
The Kenyan treasury bonds offer quarterly, semi-annuals or annual T-bonds with repayment periods of between one to thirty years. The amount of interest varies on the time period of the bonds and the amount issued. A bond usually has a time-period in which an investor is compensated with a certain amount of pre-agreed interest, once the time period is over.
Table Banking or Collective Savings
Table banking is one of the best ways in which investors grow their savings. An investor joins hands with other individuals and households contributing their money in a common fund. Members of the scheme can get a loan at an interest rate of 5 to 10 percent. Members have a reliable source of working capital as their business grows.
Savings and Credit Co-operative Society have enabled the Kenyan micro financial sector to grow over the years. The returns from an investment in a SACCO come in the form of dividends from interest on loans. SACCOs are governed by the SACCO bylaws which state the objectives, membership, share capital, organisation structure, management and lending regulations. Most are managed by a professional team, which reports to a committee elected by members annually. As a member of the SACCO, you can earn interest on your savings which are part of what you have borrowed, lowering your borrowing costs further. SACCOs have lower interest rates and can help you accumulate a substantial savings base.
Starting your Business
Investing money in yourself is a good way to guarantee your own future growth and expansion. You can utilize your skills, education, work experience and unique capabilities when choosing to start your own business. Entrepreneurship can teach you how to manage resources and diversify when your business income grows. You may consider to invest in online courses or skill-building courses and sell your services online at platforms like Upwork or Fiverr. You can also start an online business which is cheaper to set up. Research how you can market your business over the internet inorder to attract more buyers.
Before deciding to invest in any of these investment opportunities, make sure you understand how they operate and prepare yourself to handle the responsibilities involved. Make sure you educate yourself before making any investments.