Mr, Naikuni Seeks a new Term at the East Africa Portland Cement

Kenya Airways CEO Titus Naikuni will today afternoon become the first of the unsuccessfully ousted directors at the East African PortlandCement Company (EAPCC) to seek a fresh term at the company.

Mr Naikuni will be seeking re-election at the firm’s AGM amid a push by the government, which owns 25.3% of Portland Cement, to have new people on the firm’s board.

The KQ CEO has served on the EAPCC’s board since July 2007 and was one of the eight directors that then acting Industrialization Minister Amason Kingi accused them of poor governance and had them ousted from the firm last December.

His re-election bid is definitely a testing ground on whether the government has given up overhauling the cement firm’s board or is willing to reignite its pursuit to having new directors steer EAPCC.

Sources at the Industrialization ministry, which represents the government’s interest in the cement company, said that the State is still devoted to getting new faces on the board, raising interest in how it will take part in today’s election (Friday) at the AGM.

The firms’ directors, including Chairman Mark ole Karbolo, Kephar Tande, Naikuni and lawyer Hamish Keith, moved to court earlier this year to block their removal from the board following Mr Kingi’s order. 

The court reinstated them in a legal battle that also saw the president revoke the replacement of Mr Karbolo.

The government will therefore require votes especially from the National Social Security Fund, which has a 27% share, to push its agenda both at EAPCC’s boardroom and the shareholder meeting.

 Bamburi Cement and its parent company Lafarge have a 41.7 per cent stake in the firm

What a SACCO can do for you.

What a SACCO can do for you.

Savings and Credit Co-Operative (SACCO) are associations registered under the Ministry of Cooperative Development & Marketing and authorized to take deposits from and lend to it’s members.

SACCOs are governed by the SACCO by-laws that state the objectives, membership, share capital, organization structure, management and lending regulations. The sector is regulated by the SACCO Societies Regulatory Authority (SASRA).

Why should you join SACCOs?

1. Cheap loans

Members of a SACCO, have access to loans from the SACCO guaranteed by their savings or those of other SACCO members. They lend money to their borrowers up to 3 times their savings. SACCO loans are often short term and priced lower than bank loans.

2. Build Credit Information

A person’s saving and borrowing information is recorded by the SACCO at all times. If repayment of all loans is done promptly, the individual’s borrowing record adds to his/her credit reference information which becomes useful in later days when they want to get bigger loans from other institutions.

3. Asset acquirement

Some SACCOs have arrangements with their members where the institution guarantees a member’s acquisition of assets. In these arrangements, members can get household items, plots, cars and stock for business with easier repayment arrangements.

4. Investments

SACCOs are a perfect way to channel your savings. The SACCO aggregates the savings and lends them out or invests in authorized instruments such as shares, treasury bills and bonds, and in some cases property as authorized by the by laws. Returns from SACCO savings for a member are usually high and sometimes better than what banks offer.

Africa Development Bank Sets Priority to Donor Funded Projects

Africa Development Ban Sets Priority to Donor Funded Projects

The African Development Bank (ADB) has called on the government through it’s ministries to make sure that a quick and timely implementation of various projects in the country which have already been funded, especially by the donor community.

The bank’s East Africa Regional Director Gabriel Negatu said that a delay in the execution of these projects may hinder Kenya from achieving the benefits of vision 2030.

Some challenges facing the projects include extended procurement processes, delay in release of funds and lack of clarifications on the existing projects.

According to Negatu, it is important for the country to move quickly towards the implementation of the existing programmes once they are financed. He further said that in the past, a number of countries have delayed for various reasons and Kenya is not an exception.

According to the report released by the TransparencyInternational in June , some of the major hindrances for the opportune implementation of various government programmes are poor planning, corruption, delays in payment, lack of proper payment procedures and Information Communication Technology in the procurement processes.

Negatu argues that international donors should also keep track of the projects to also ensure transparency by demanding regular audits during and finalization of the projects.

“Sometimes our own processes can be lengthy. So we should make sure that they are friendly, easy to understand in that the implementing partners should fully know what is expected of them. This will enable us to reduce the time it takes, to procure, disburse the funds and finish the project,” Negatu continued.

Negatu was speaking during the signing of a Sh77 million grant to support the ‘Scaling up of integrated rainwater harvesting and management in semi-arid districts of Kenya’.

The project is to be implemented by the Kenya Rainwater Association and will include the construction of communal earth dams and school roof catchments tanks, school sanitary facilities, farm ponds, tree and vegetable nurseries among others.

The project which is expected to start in January is expected to benefit 15,000 pastoral and agro-pastoral communities with close 3,000 schools.

Co-Op Bank signs a Sh5.b deal to boost SMEs

Co-Op Bank signs a Sh5.b deal to boost SMEs

Cooperative Bank of Kenya has signed a Sh5.1 billion loan agreement with the International Finance Corporation (IFC) to increase its credit to Small and Medium Enterprises in the country.

According to Gideon Muriuki the bank’s Managing Director, the loan which has seven years tenure will also be used to support agriculture projects.

He further said that the first consideration that the bank will make is not based on where they come from but a person’s ability to pay back. Because by the time the bank is to repay the facility to IFC I have to ensure that the customers have paid.

The bank has however opted to give the loans to customers in dollars therefore only targeting those who get their income in foreign currencies so as to hedge on the foreign exchange risks.

Co-Op bank recently received a Sh7.5 billion fund from European Investment Bank (EIB) to support the SMEs.

Oumar Seydi who is the new IFC director for East and Southern Africa called on the bank not to put stringent measures while extending the loans to the SMEs as it has been the biggest challenge for credit access.

He further reiterated that IFCs aim is to grow businesses and reduce poverty through the private sector. Therefore it will provide its instruments based on market rates and it trust its partners in how they run their operations.

The banks net loan book in the third quarter of 2012 increased by 11.3 percent to Sh118.4 billion up from Sh106.4 billion in the same period.

Meanwhile Muriuki said that the bank has finalized its joint venture from its subsidiary in South Sudan where the latter’s government holds 49 percent stake with the bank holding 51 percent.

The government of South Sudan will hold the stake in trust for three years before handing it over to the Co-Operative movement that is being developed in that market.

Samsung Smart School to grace the Kenyan schools

Samsung Smart School to grace the Kenyan schools

Kenyan primary schools will soon turn away from the use of exercise books and blackboards. This will however be so after Samsung East Africa’ project aimed at transforming traditional classrooms into multimedia teaching environments comes to play.

Samsung Electronics East Africa has put in place a program set at the integration of digital technology in basic education. If this comes to light, it will bring an evolution of basic learning solutions in local private and public schools,

The current pilot program taking place at the Nairobi’s Samsung Engineering Academy facility, dubbed the Samsung Smart School, is aimed at transforming the traditional classroom.

Samsung Smart School allows for greater interaction and student engagement, which will result to improved student performance. Students will also be able to learn more efficiently by accessing additional online resources as they take their classes.

Speaking during the closing of an exposure lesson for Lavington Primary School pupils, Samsung Electronics East Africa Business Leader in Charge of Service, Koki Muia, explained that the transformation involves replacing exercise books with Samsung Galaxy Tablets for the pupils’ notes taking.

Muia said that teachers and students, can communicate interactively using the Smart School technology utilizing the GALAXY Note 10.1, the Samsung Smart School, E-Board and the central PC to engage students in class.

Essentially, the Samsung Smart School solution features a mobile learning solution that leveraged Samsung tablet PC’s and an electronic blackboard to create an interactive multimedia classroom environment.

With the Classroom Management (CRM) functionality, the teacher can directly send whatever is on the board to the students’ GALAXY Tabs and monitor their devices. The Mobile Learning Management System (m-LMS) on the other hand provides multiple learning features such as resource sharing and assignment management.

With Samsung Smart School, the teacher is well equipped to help in the improvement of the students’ levels of concentration as well as their performance. The students can download resources for independent study after school and take tests online.

If you are an investor in Equity bank shares, start planning an exit strategy

Source: Soko Analyst

If you are an investor in Equity bank shares, plan an exit strategy

If there was a time when investing at the market was something at its optimal best, the time has been the last 3 weeks, when foreign investors have been taking up key positions on very lucrative bargains on key shares that will definitely give them optimal returns in the next coming weeks.

The unfortunate twist to this despite the fact that they have lifted the 20 share index of the NSE is that local investors have bailed out or sold their options to them. Banking stocks have been of keen interest to the foreign investors given the set of fundamentals that these stocks have been exhibiting and the fact that all of them just released their last quarter’s financial results.

As banks have very different operating structures than regular industrial companies, it stands to reason that investors have a different set of fundamental factors to consider, when evaluating banks. This is not meant as an exhaustive or complete list of the financial details an investor needs to consider, when contemplating a bank investment.

These are technical aspects of evaluating a banking stock and in my analysis, I always try to omit these facts because the Kenyan NSE does not operate on key fundamentals but rather human emotion of the investors at the behest of current affairs in the industry.

Equity as of today saw a  demand  of 2,673,500  shares against a supply  of 1,508,600 resulting to a best bid of 23.50 and best as of 26.50 to close at 24.50 per share with zero per cent change on the price compared to the previous day with a turnover of 149,098,496 and 105 deals as of 1513 hours today. The increased demand was from foreign investors and this will continue for the rest of the week as they look for the perfect pendulum moment to settle and ensure a balanced trade on the stock.

This is because of the just released results and the fact the CEO has been in the news for the last two months for all the right reasons, giving the brand an emotional endearment to its investors. Especially after the CEO was named the business person of the year, coming on the heels of a serious social responsibility venture that the bank has embarked on in terms of raising an army of young trained entrepreneurs and a changed and better exposed new board room members and a new CEO.

These factors have seen the stock become very valuable in the eyes of the foreign investors however, every good thing reaches its plateau curve and equity has reached its curve. It’s time to sell and relocate the funds to other stocks. Equity won’t surpass the 31 KES per share mark given the fact that the results released have shown a decline in profits for the first time in a long time. Banks like KCB have come and overtaken it in this department. Not to mention that it’s been found to be the most expensive bank to get a loan especially for its target client.

Also working negatively on the share is the perceived rumor that the bank has the support of the government in its operations and that’s why it’s done well and that any change in an administration that won’t seat well with its ideology might just impact its performance in a serious negative way.

In addition, it’s the one bank that has stalled on innovative ways to keep attracting the target market through mobile innovation.

Our analyses for further action on this is that if you have shares here, then plan an exit in the next one month, if you interested in getting in, then get in now with the aspect of large volumes to benefit from the action of marginal trade. In the next month, the stock will hit plateau horizon and be there for the next 6 months until after elections are done.

               

Safaricom takes on banks with micro-loans product

Safaricom’s foray into the financial services market is expected to deepen on Tuesday morning with the launch of a mobile banking service that allows users of its revolutionary M-Pesa platform to save and borrow money using their phones.

Safaricom partners with CBK to offer loans. #M-Shwari

Also read: Safaricom biggest loser as CCK cuts termination rate 

The service, which mainly targets micro-savers and borrowers, requires users to open a mobile bank account, M-Shwari , into which they can deposit as low as Sh1 in savings and borrow up to Sh100,000 payable with a one-off interest rate of 7.5 per cent.

All loans are payable within a month of disbursement.

People familiar with the product told the Business Daily that deposits in M-Shwari accounts will earn a graduated interest up to a maximum of five per cent per annum.

Safaricom is offering the service in collaboration with Commercial Bank of Africa (CBA), which has been the primary banker for M-Pesa, Safaricom’s mobile money platform.

Users of the mobile banking service will remotely open the M-Shwari account by simply clicking on their phones. This will spare them the pain of filling application forms as happens with traditional banking.

“It is simple. There are no ledger fees, no limits on the frequency of withdrawals, no minimum operating balance and no charges on deposits for M-Pesa to M-Shwari account,” said Bob Collymore, the Safaricom chief executive officer.

Safaricom is positioning M-Shwari as a groundbreaking financial service that promotes a culture of saving among ordinary Kenyans and allows those with no collateral to access loans through their mobile phones.

Mobile money enthusiasts declared the service another revolutionary product with the potential of taking the ongoing convergence between telecoms and banking sectors higher but critics warned of the dangers that lie in the high interest rates and the one-month loan term.

The M-Shwari service is designed to act as a rudimentary credit facility for those who have been locked out of the loans market for lack of collateral and credit history.

“M-Shwari will attract a one-time facilitation fee (read interest rate) of 7.5 per cent of the borrowed amount,” Safaricom said in a statement.

Though the 7.5 per cent interest looks competitive compared to interest charged on commercial bank loans, that advantage is severely eroded by the one-month lending period that will mostly require borrowers to pay a lump sum amount to settle the debt compared to smaller monthly instalments paid by those who borrow from commercial bank.

For instance, a loan of Sh100,000 from the mobile bank account would attract a Sh7,500 interest charge, which means that the borrower pays back Sh107,500 within 30 days, including the principal.

A similar bank loan attracting interest at the current average rate of 20 per cent, would be repaid at the rate of between Sh9,150 and Sh9,200 per month for a year on reducing balance.

This would translate to an interest burden of Sh11,161 spread over 12 months – compared to Safaricom’s Sh7,500 interest payable in a month.

Safaricom is relying on the spending patterns of its customers, traceable from their airtime top-ups and M-Pesa transactions to determine the creditworthiness of subscribers.

Credit evaluation experts see this as giving the telecoms firm an edge over banks, especially with regard to target market that is mainly made up of informal sector operators who have been unable to secure loans for lack of cashflow statements, payslips and collateral.

To qualify for an M-Shwari loan, one needs to be an M-Pesa subscriber for at least six months, deposit some savings in their M-Shwari account and be a regular user of other Safaricom services such as voice, data and M-Pesa.

And to open an M-Shwari account, consumers will go to the Safaricom menu in their phones, select “M-Pesa”, go to “My Account”, “Update Menu”, enter “M-Pesa PIN” and wait to receive the updated M-Pesa menu.

Commercial Bank of Africa is hoping to hook a large segment of Safaricom’s 19 million subscriber base to M-Shwari as well as the telecom firm’s network of 47,000 distribution agents to deliver the service.

It is estimated that more than Sh300 billion of money in circulation in Kenya is outside the formal banking system and M-Shwari is designed to bring some of that money into the formal banking channels by targeting the 12 million Kenyans identified by the Central Bank of Kenya and the Kenya Bureau of Statistics as unbanked.

Safaricom launched a similar service with Equity Bank in May 2010 but the initiative collapsed a few months later amid reports of disagreements over fees and revenue sharing.

It also comes just six months after Airtel launched its credit-over-the-mobile service offer, targeting commercial banks’ core lending business at the lower end of the market. Airtel’s loans are capped at Sh10,000 and are issued in partnership with Faulu Kenya, a micro-financier.

The partnership between Safaricom and CBA comes after last week’s release of Central Bank of Kenya data showing that Kenyans transferred Sh1.117 trillion through their mobile phones, helped by the interface between banks and cash transfer services of telephone firms.

The value of all economic activities in Kenya — or the Gross Domestic Product — was Sh3.7 trillion last year.

CBK said the increase in mobile money transfers was being fuelled by the high number of consumers moving money into and from their bank accounts using mobile phones.

Kenya’s six biggest banks have established mobile banking platforms that allow consumers to access their accounts through their phones.

Kenya’s mobile phone operators first rattled the banks with money transfer services five years ago, forcing the lenders to form partnerships with the telecom operators for a share of the fees charged on the multi-billion-shilling domestic transfers.

The direct entry of Safaricom into the lending market is expected to lift its earnings from M-Pesa, which was introduced as a money transfer tool but has evolved into a utility bills payment and credit service.

Daily M-Pesa transactions stand at two million and are valued at Sh2 billion. M-Pesa users now stand at 15.2 million, having grown from 52,452 at its launch in April 2007.

Revenues from the service rose 32 per cent to Sh10.4 billion in the first half of the year ended September 30, making it a critical growth area compared to the voice business, which has been hit by a vicious price war.

M-Pesa’s contribution to Safaricom’s total revenue rose to 18.6 per cent from 17.1 per cent, with Safaricom’s parent company, Vodafone, set to take the service global by signing more partnerships in multiple markets.

www.businessdailyafrica.com

CBK launches new campaign to ease coin shortage

You can take your coins to Your nearest bank for notes

Central Bank of Kenya has launched a coin usage campaign dubbed “Chomoa coins” to help it fight the current coin shortage which has been attributed to poor circulation.

The regulator holds that there are enough coins in the economy with the shortage being a result of persons, especially those in the middle and upper income bracket, keeping them out of circulation by holding them in their homes, cars and work places due to the low value they attach to them.

“Most of you have witnessed situations where token items such as sweets or matchboxes are offered in place of coin-change. This is a practice that we would like to see stopped,” said the governor Prof Njuguna Ndung’u.

He said there are 1.31 billion pieces of coins in various denominations in circulation with an estimated value of Sh5.1 billion. This, he said, was adequate for the economy indicating that the shortage would not be addressed by adding new coins but by ensuring there was an efficient mechanism for re-circulating existing ones within the economy.

The public has thus been urged to use coins in their shopping, changing them with supermarkets for note values or operating children accounts where they can deposit with the banks.

On the other hand banks have been discouraged from charging a fee on those who are depositing coins as is currently the case as this also becomes a barrier.

“We are asking Kenyans to collect their coins. Deposit them in a bank or use them to make a purchase, no matter how many or how few,” said Habil Olaka, CEO of Kenya Bankers Association.

The coin shortage has seen some traders hike the cost of their goods and services to the nearest five shillings in order to avoid the hustle of searching for coin change.

CBK had conducted a similar campaign in July last year which the governor said had been successful in bringing the coins into circulation.

“The campaign was successful bringing large amounts of coins into circulation but in the early part of this year the momentum seemed to have waned and reports of perceived coin shortages resurfaced again,” said Prof. Ndung’u.

He said that they were looking for a sustainable solution so as to avoid having to conduct campaigns each year.

http://www.businessdailyafrica.com

Why does the UN Want to Take Over the Internet?

On the 3rd, Internet sanctions may
be validated by The ITU.

On the 3^rd of December, 2012 The International Telecommunication Union (ITU), branch of the UN, will be meeting to discuss an outdated communications treaty. This meeting that will take place behind closed doors could threaten our very freedom and our ability to connect with others throughout the rest of the world. Our Internet should be open and inclusive not threatened with censorship that could stifle innovation!

“Contrary to some of the sensationalist claims in the press,” ITU Secretary-General Dr. Hamadoun I. Touré shot back in a speech last week at Columbia University, “WCIT is definitively not about taking control of the Internet or restricting people’s freedom of expression or freedom of speech.”

Despite Dr. Touré’s reassurances, however, claims that the WCIT is being hijacked are hardly sensational–nor are they being raised by “the press.”  Rather, a remarkably broad coalition of governments in both developed and developing nations, advocacy groups on the left and the right, and leading international Internet engineering groups have all been sounding the alarm.

Making the best use of You Tube

Take your marketing a notch higher 

You Tube is the currently second biggest search engine owned by Google which is the first biggest search engine in the world. Pound for pound there is no comparison between the two but make no mistake You Tube remains as the most powerful tool for promoting your business, charity or non-profit organization as well as getting your message to the right people.

From personal experience, I understand how good You Tube is especially for practically researching on anything. On YouTube, there are good films out there that can help you get your head round so many things both big things and little things.

To quote a personal example recently, I wanted to update my blog on HTML. I took the first step with the little knowledge I had, went round and round trying to fix flash on the header in vain impossible.

After a several minutes of exhausting activity I was definitely getting nowhere and that’s when my colleagues suggested that I use Google it. I pooh-poohed the idea and got even hotter and more disturbed until when I eventually gave up and asked her to try Google on my behalf.

Within seconds she found a clip on You Tube which demonstrated how to get that flashing header on the blog using HTML. So the message here is, whenever in doubt try You Tube.

Well for the moment at least it is pretty easy with the right kind of tagging. Today I look forward to doing a short video on how to use social media as a marketing tool, an You Tube is my channel of transmission.

The result is that his film has rocketed up the pages and is now taking pride of place just below the paid for positions. It is not like SEO - a mystical process akin to shovelling fog into the back of a lorry, it does not take months to see the benefits. The progress only took minutes and it really is not that difficult. So if you want to get ahead of the game on You Tube while you still can - give me a call.

And going back to the pop-up, why were there no instructions for getting it back in the bag

Limited Boundaries? Not as per the Slum Fest.

Technology is definitely on business tool you need to embrace

By now, I suppose you are aware that the 6^th Slam Fest took place sometime last week. Woe unto you if you had no idea of what this is because by now, whoever attended the tech Festival is by now putting into play the sentiments aired by the attendants. There was a lot to learn and ape from fellow business people and other tech exhibitors. In my opinion, awesome would not be enough a compliment for that. Super awesome, that is it.

The theme of the fest was 'the power of infinite possibilities - leveraging the ICT space' and I presume you considered this a serious only geek faces event. However, this was not the case as it was more of an entertainment event. All class and no play makes Jack a dull boy you know, this is exactly what made the event a unique experience.

This time, not only for you, but we got an all new dimension to the way we at KB do things. Since we have always worked towards ensuring quality service delivery,, from this event we built an all new dimension on the way we do things even in our office.

Considering the uniqueness of the festival, we decided to get a new and unique way to improve our products for you. Take two “You sure do not have to wear that tough face to deliver a point”

From the interactions with the exhibitors, it is evident that people are working round the clock in seeing to it that solutions arise from the advantages of the internet. People are working round the clock inventing and building ideas based on existing problems.

You now side with me that the slam fest was not just the usual events we attend and slam you with content, but a partnership and event that definitely bring a change in the way you will be receiving information.

Not only for my new way of reporting, but even the activities in the three blogs that I run as well as participation in brainstorming sessions have definitely changed. Talking to different attendants after the festival, most business managers emphasized on the new measures they would take whenever they hold their office meetings and brain storming sessions.

This is a change any business set up could emulate given that constant interactions among employees and the management help in building the employer – employee relationships as well as increase revenue generation since this interactions help increase the product value.

Talking on Employee-employer relationships and brainstorming, I confirm there is more in the tunnel. From the event coverage, you get the understanding of why technology is quickly taking pace, reiterating comments from known local artiste -Juliani, we understand that the internet is not only a source of fun and entertainment but  a place you can share an idea and probably get an idea as well.

Roughly 60% of Kenya’s vision 2030 focused on the internet and the online platform as a tool of propulsion for the vision to succeed. Professor Mugo Kibati echoed the departments’ vision saying that with solutions online and business people taking advantage of the online medium, it will be easy and quick to reach all the components of the Vision 2030.

Speaker by speaker, heaped praise on the Slam Fest 2012 organizers as this fest comes at a time when Kenya is ranked among the best countries in Africa when it comes to offering solutions online as well as with the best internet speeds and connectivity in Africa.

Germany Opens its Doors for Kenyan Products

Germeny-Kenya trade

Germany will soon open its market to products and raw materials from Kenyan companies and manufacturers according to Mr. Karl Wondling, Germany’s deputy director of the Federal Ministry of Economics and Technology.

Mr. Karl, during his tour at Kevian Kenya Limited in Thika revealed that Kenya and Germany will enter into a formal partnership that will facilitate further trade relations between the two countries.

He indicated that the cooperation between Germany and Kenya is set to go a notch higher especially in trade partnerships. Echoing on these sentiments, Mr. Richard Kimani Rugendo, Managing director at Kevian said that the agreement would be a win-win option for both the countries.

Mr. Karl further urged Kenyan companies to strive towards the attainment of high production standards for them to exploit the German market. He insisted that if they met their (German) standards, then their market will open up for the Kenyan forms.

Kenya last week became the third country in Sub-Saharan Africa, after Angola and Ghana to host a delegation of the German Industry and Commerce which set up an office in Nairobi. This office will be used to enhance trade relations between Kenya and Germany.

Peering into deeper trade detail, we found out that Kenya is the seventh largest export destination for German products in sub-Saharan Africa, while Germany is the third largest trading partner for Kenya in the European Union.

Last year, Kenya traded volumes worth $477 million with Germany and with the betterment of trade partnerships and relations between the two states, this is bound to increase.

The Kenyan small business owners and entrepreneurs will see this as an avenue of creating trade relations with other firm s in Germany and the European Union as a whole

Most banks Prefer Uganda for Expansion

Uganda Proves a Suitable Banking hub in E.A

According to Standard Investment Bank’s banking sector preview, Uganda is the most preferred destination for most banks seeking to expand in the East Africa Region in 2011 compared to Kenya,.

The survey indicated that Kenya was still weighed down by slow Growth Domestic Product (GDP) expansion, high volatility in inflation and high average debt-to-GDP ratio compared to Uganda.

Among the four East African Community countries, the survey ranked Rwanda as the best country for any bank to venture into first, when setting up regional operations followed by Kenya, Uganda then Tanzania came in last.

Based on the test results, there was an advantage for banks to expand their operations across the region. It further indicated that expected returns from different regional markets vary and therefore management should make a conscious decision on which markets to operate in.

The report further showed that most of the banks used the strategy of setting up on subsidiaries first while venturing into new markets in the region.

By 2011 Kenyan banks dominated the region, with 10 banks operating in 179 branches. Kenya Commercial Bank commands the largest regional share of 29.6 percent, while other five unlisted banks controlled 19.6 percent.

The bank says the market fragmentation across the region is bound to increase as more banks opt to set up new subsidiaries.

Meanwhile, in 2011 average interest rate spread across the four countries stood at 12.7 percent with a high of 18.3 percent in Uganda and a low of 9.3 percent in Rwanda.

The high spreads were attributed to the scarcity of credit from alternative sources and good source of low-cost retail deposits.

Apart from regulatory pressure in the medium term, the report indicates a bleak in ant positive foreseeable changes in this sector.

In 2011 Rwanda’s GDP growth went up by 7.4 percent, Uganda 7.4 percent, Tanzania 6.8 percent and Kenya 4.3 percent.

Business News Kenya: Lake Turkana Wind Power Project endorsed by the K...

Business News Kenya: Lake Turkana Wind Power Project endorsed by the K...: Wind power is a cheap and reliable power source for Kenya The Vision 2030 Delivery Board will soon sign a Memorandum of Understanding ...

Lake Turkana Wind Power Project endorsed by the Kenya Vision 2030

Wind power is a cheap and reliable power source for Kenya

The Vision 2030 Delivery Board will soon sign a Memorandum of Understanding (MOU) with Lake Turkana Wind Power (LTWP) that will endorse the largest single private investment worth KSh75 billion in the history of Kenya.

This project will produce 300 Megawatts (MW) of dependable, low cost wind power to the national grid, an equivalent of approximately 20% of the current installed electricity generating capacity. The wind power generating site, is spread over 40,000 acres of land and is located in Loyangalani District, west of Marsabit County, in north-eastern Kenya.

The LTWP Chairman Mr. Carlo Van Wageningen said that the wind energy resource at Lake Turkana is exceptional and able to meet the estimates set. He further said that the average wind speed is just about 11 metres per second and that it blows consistently from the South East. 

Given this exceptional wind resource at the project site, the project will be a reliable and cost efficient source of energy for the whole country. Van Wageningen said that in addition to providing a reliable low cost power, the project will also aid in bringing numerous macroeconomic, community and social benefits for the people living within the region.

Experts claim that the projects will take approximately 32 months to complete during which, approximately 2,500 part time jobs will be created and later over 200 full time jobs throughout the period of operations that will mainly target local Kenyans. 

The company will implement a comprehensive training and international skill transfer program to ensure quality skills on site. Furthermore, this will not only help in capacity building for individuals but also intellectually promote in the growth of Kenya as a whole.

The Government’s Least Cost Development Power Plan shows that LTWP wind power will be one of the least cost power generation options available in the country. This project will replace the need for Kenya to spend approximately Sh15.6 billion per year on importing fuel.

This project therefore reduces the need for depending on unreliable hydro and on expensive, unpredictably priced fossil fuel based power generation. It also insulates Kenya’s power costs by providing a slightly low and consistent power price according to the Director General of Vision 2030 Delivery Board Mugo Kibati.

CMA seeks consultant to review fees, levies

Story by James Anyanzwa (Standard Media)

http://www.standardmedia.co.ke/?articleID=2000067659&pageNo=2

Stella Kilonzo (CEO - CMA) picture courtesy of area254.com

The Capital Markets Authority (CMA) is looking for a consultant to carry out a comprehensive review of fees, commissions, and levies paid by investors and issuers, which have partly been blamed for the industry’s lacklustre performance.

The authority has issued out an expression of interest, seeking to engage an independent consultant to review the various fees, levies and commissions charged in the market. This will include but not limited to regulatory fees, Nairobi Securities Exchange (NSE) fees, Central Depository and Settlement Corporation (CDSC) fees, and transaction levies.

Others include  investment management fees, advisory fees, issue costs, brokerage fees and commissions. The findings and recommendations of the study will inform policy review of the current fee structure.

The move is part of CMA’s efforts to deepen the capital markets, whose role in resource mobilisation is critical in the achievement of the country’s long term development blue-print Vision 2030.

The consultant is expected to undertake the study with reference to the various fees, commissions and levies charged in the market. This will assist in determing their adequacy, the impact of various fees to overall transaction costs and the relevance and basis for charging/determining the fees and justification for each specific fee.

The consultant would also be required to consider the relevance of various fees in determining the choice of investment or fund raising option, consider other ways of generating fees and revenues for CMA, NSE, CDSC and market intermediaries and consider level of competitiveness of the current market fees relative to other jurisdictions comparable to Kenya. He or she would then be required to recommend optimal fees structure for the Capital Markets.

“The CMA now invites interested candidates to express their interest to provide the services. Interested persons must demonstrate ability and capacity to undertake the assignment,” said CMA.

Each transaction on the securities exchange attracts a commission of 2.1 per cent for any transactions worth below Sh100,000 and 1.8 per cent for any transactions above Sh100,000.

Listed companies

CDSC’s main source of revenue is a transaction levy charged on each transaction settled through the CDSC and a depository levy charged to listed companies on the basis of the number of transactions per year but subject to a cap. 

The CDSC is paid a transaction levy of 0.06 per cent and 0.002 per cent of the value of equity and debt transactions in the secondary market respectively. CDSC also collects levies from pledges, releases and foreclosures. CDSC proposes that the transaction levy rate be increased from 0.06 per cent to 0.12 per cent of transaction value.

Rising operational costs, falling revenues, stiff competition for limited consultancy contracts and fluctuating trade volumes at the NSE are swiftly pushing stockbrokers, investment bankers and fund managers into financial distress.

“ Basically our concerns have to do with the level of commissions. Over the last one year or so the performance of the NSE has not been impressive with volumes going down,” said John Kirimi, Executive Director at Sterling Capital Ltd. “ As we go forward we have to prepare for the worst because our business is perception-based.”

Rules to help SMEs list at the NSE

SMEs will soon be able to list in the NSE

The earlier proposal that sought to have (small and medium enterprises)SMEs listed on the Nairobi Securities Exchange (NSE)   moved closer to fruition with the gazettement of new policies.

A message from the Nairobi Securities Exchange chief executive officer Peter Mwangi, revealed that the new rules will offer small and medium sized companies a platform to access long-term and relatively cheap capital. SMEs will also be able to raise their profiles through their participation at the NSE.

This follows the approval of Nominated Advisors (Nomads) rules and the NSE’s ongoing training of prospective advisors on their responsibilities to clients before the listing. The Nomads will assist firms to list and to comply with the good corporate governance practices.

The acting CEO, Capital Markets Authority acting Mr. Paul Muthaura revealed that they are looking forward to training at least 50 market intermediaries in the next 100 days in a new programme.

Mr. Mwangi also said that they will also offer lessons on corporate governance to directors of mid cap companies.  They are doing this so as to reassure investors seeking to invest in the fast growing and well run small companies.

The NSE is in the hunt for regulatory approval that will allow it to list on the bourse by mid next year. Its shareholders have already approved the listing through the introduction of the bourse to the Alternative Investment Market Segment.

Mr. Mwangi further said that the Capital Markets Authority gazetted the demutualization regulations in August and that they are now making a formal application, as required by the regulations.

Starting October 3, the NSE and FTSE International will be introducing FTSE NSE Treasury Bond Index that will allow investors to use an independent benchmark for the first time to measure their bond portfolios performance.

This new program gives investors the opportunity to access current information and provide a reliable indication of the Kenya Government bond market performance.

The NSE officials were speaking during the Diamond Trust Bank’s listing of new shares following the completion of a rights issue where the bank sought to raise Sh1.8 billion to fund its expansion plan in East Africa. The bank will use the funds to explore alternative investment opportunities sub-Sahara Africa.

Kenyan company rolls out a social media monitoring software

You will soon be able to track your social media effectiveness

Kenya-based new media company African Laughter has launched a social media monitoring phone app to help politicians and business people to monitor their reputations online.

 Named Track-All, the app is capable of delivering every media and social media mention on any subject as real-time alerts to the phone.

The app was developed in eight months at a cost of approximately KSh5 million. It analyses mentions on social networking platforms including Facebook and Twitter for ‘sentiment’, alerting users on positive or negative posts. It can also show social media users who comment most on a post and the top keywords.

"With this phone app, we've opened media monitoring directly to all who need it, made it effortless, and built software that analyses what's being said for its impact,” Jenny Luesby, African Laughter’s managing director, said in a statement.

The app is designed for political, issue-based and public opinion research although, according to African Laughter, it bears a different format for corporate reputation and PR. It is currently being targeted at candidates in the general election scheduled for March next year.

"We've experienced much more interest from ODM candidates than any others,” said Luesby. “In terms of sales and presentations, we're very actively engaged with a range of candidates, but still only a small proportion of all the candidates in the coming election.”

According to the Communication Commission of Kenya (CCK) in its June 2012 report, there were nearly 6.49 million Internet subscriptions, up from 6.15 million in the previous quarter. This growth was partly attributed to the increasing use of the social media.

With social media becoming a hotbed for political debate, experts say developers and politicians can no longer ignore this mobile and Web technology.

Track-All, developed by the company’s head of IT Dennis Rwito and Appcircus competition winner Isaac Osiemo, will be available with a free 7-day trial and different grades of service, offering from one to five users and one to three searches.

A 6-month license will cost between KSh60,000 and KSh120,000, depending on the levels of analytical features demanded. The packages can be subscribed to using the M-Pesa mobile money service.

http://www.humanipo.com/blog

Kenyan IT gurus to get training from top notch firm

The Kenyan graduates studying IT will undergo free high level SAP certification training, thanks to a three year partnership between the Kenya ICT Board and leading enterprise application software provider SAP.

The training program dubbed “SAP Skills for Africa” is aimed at improving the employability of university graduates. And it will begin in January with the enrolment of about 100 students who will start applying in October.

The Kenya ICT Board Program Manager for Business Process Outsourcing Andrew Lewela said that they will be in charge of the overall management of the programme and will also provide classrooms with necessary computer infrastructure.

He further revealed that IT spending will grow to about 17 percent every year however employment under this sector will be less than 10 percent and this appears to be increasing.

This initiative therefore is set to create an authentic examination that will test for certified software developers. Many institutions have focused on the theoretical side of things and forgotten the actual testing of how to test software and make it secure.

According to the Julisha Report, a national ICT Market survey taken in 2011 by the Kenya ICT Board, about 9,600 professionals are added into the ICT market every year. however,  a third of the company’s surveyed plan to contract external providers because the present supply of skills do not meet business requirements in the sector.  

The report further reveals that the ICT sector directly employs about 27,000 professionals and that software development and project management are the most demanded skills for the 2011-2013 periods and represent the areas with the widest skills gap.

The report also indicated that there is very little visibility on the demand for specific skills, suggesting that greater and closer collaboration is needed between education institutions and businesses to determine the exact mix of skills needed in the market.

To address this issue, SAP Africa CEO Pfungwa Serima revealed that they will provide instructors, training materials and educational systems and that they aim at training at least 500 students for free and get them employed within the next three years.

The SAP Skill for Africa programme aims at ensuring that each and every university graduate is equipped with the skills necessary to enter the job market and not only gain economic stability and prosperity, but also to be able to plough back into the ecosystem.

http://www.gbc-inc.net/partnersap.htm

Private equity firm seeks KSh100bn assist SME growth.

Fusion capital to assist SMEs in East Africa.

Fusion Capital a local private equity firm, is seeking KSh100 billion in the next five years to increase its funding for Small and Medium Enterprises in Kenya and across the East African region.

The private equity fund that finances Small and Medium Enterprises as well as start-ups will be looking to raise this money from private investors in Europe. Development Finance Institutions (DFIs), high network individuals and companies in Kenya to grow its financing for the fast growing SME sector in Kenya.

Luke Kinoti, the Fusion Capital chief executive officer confirmed that this will boost the firm’s funding activities as it targets more upcoming firms in the East African region. The firm already has four branches in Kenya, Tanzania, Uganda and Rwanda.

This would help the firm in extending its funding to less than 10 per cent interest in the different sectors of the economy. At the moment, the firm has 425 SMEs being financed to a tune of KSh15 billion.

During the Fusion Business Club launch, Mr. Kinoti confirmed that the firm is not only able to provide funding to any SME or start-up that is able to borrow from Sh1 million to Sh300 million but also help in strengthening their management or governance structures.

He further said that the firm is seeking to raise Sh680 million between now and March next year to continue supporting SME operations.

There are about 50,800 small and medium enterprises that each employ between five and 49 workers.

Mr. Kinoti further said that the firm has submitted a proposal to the Capital Markets Authority (CMA) to allow it to be listed on the Nairobi Securities Exchange (NSE) in future.

Speaking at the same function, assistant minister in the Ministry of Industrialization said that the government has put in place incentives like investment certificates that would allow them to recover their investments before they are subjected to tax.

This is the right move at the moment where firms are seeking for funds to aid their growth and expansion. In addition, the Small Enterprises are being recognized as a potential segment for economic development.

Nokia to collect counterfeit phones for recycling.

Nokia will has set up points to collect fake phones.

Nokia has partnered with local mobile service providers and retail outlets to collect and dispose off counterfeit phones, ahead of the planned switch-off of these devices by the Communications Commission of Kenya (CCK).

The handsets manufacturer has partnered with Safaricom, Airtel, Nakumatt, Naivas, Phonelink, and Tuskys to set up 100 collection points across the country for consumers to dispose of the fake phones.

As the CCK’s planned switch-off fake phones by the end of the month, there has been mounting concerns amongst Kenyan NGO’s, environmental agencies and consumers as to what will happen to the devices once they are discarded.

The number of counterfeit handsets around the country is estimated at over two million, and it is feared that once switched off the handsets might end up in landfills, contributing to the growing e-waste threat in the country.

The truth is that mobile phones contain a number of valuable and useful materials that can be recycled, including precious metals and plastics. In fact, for every one million phones recycled, it is possible to recover nearly 35kg of gold and 350kg of silver, which can be re-used in the production of future electronic goods according to Bruce Howe, General Manager for Nokia East Africa.

Nokia is also working with the Anti-Counterfeits Authority (ACA), National Environmental Management Authority (NEMA), as well as local operators to encourage consumers to dispose of these fake handsets in a responsible manner by recycling them.

Your Pick.

CCK has set September 30 as the official deadline for operators to switch off fake mobile phone handsets.

Experts confirm the importance of social media

Business leaders talk about social media potentials.

During a two day seminar on social media in Nairobi, experts, business owners and managers confirmed the importance of social media for business growth. The senior corporate managers had converged at Strathmore University in Nairobi for a two day forum to discuss the importance of social media.

As the world gets subjected to the trends of digitization and globalization, companies were urged to embrace the technological advancements in the ‘information superhighway’.

Echoing on the same, the 2013 Strategy Summit Program leader, Sunny Bindra talked on the importance of this new development saying that it is changing the world and revolutionizing the way we market as he urged companies to get more socially interactive. He added that every company is thinking of the best way to increase its product image how it can benefit economically and enjoy popularity for its services.

Addressing delegates on Tuesday at Strathmore University, Bindra suggested that companies need to make use of platforms offered by social media.

He said that social media has a lot of potential where companies and their employees can tap to market their products and services, interact with customers as well as popularize their products/services.

He called on government parastatals and ministries to make use of social media in promoting transparency, accountability and boost public service delivery.

Bindra advised them to dispel forces of resistance because the economic revolution cannot be stopped if the government’s wish is to serve people who have embraced the new technology especially the young people.

In attendance was businessman Chris Kirubi who echoed on the notable importance of social media saying that he believed that digitization has offered Africa an opportunity to grow and develop its economy. He added that digital is a driver opening Africa and with it, anything can happen.

He urged corporate firms to support each other especially through social media not only to benefit their companies but to boost the Kenyan economy at large.

Kenya is Africa’s second highest tweeting nation with 57 percent tweets done from mobile phones. There are 28 million mobile subscribers and 17.4 million Kenyans are Internet users. Some 1.6 million Kenyans are Facebook and Twitter users.

These statistics definitely show the importance and the potential in social media marketing for firms. You have the tools, you have the platform fly.

Your pick.

“Social media should not be ignored. It is changing the world again. Companies should think more socially and ensure interaction,” the 2013 Strategy Summit Program leader, Sunny Bindra.