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About bankelele

Writing on banking, finance and investments in East Africa. Email bankelele_at_hotmail.com, Instagram: Bankelele, Twitter: @Bankelele.

NewGold ETF top performer at the NSE in 2019

The Barclays New Gold Exchange Traded Fund (ETF) is the top performing investment at the Nairobi Securities Exchange this year.

While the NSE has introduced several new products like REIT’s, index futures, equity futures, and the M-Akiba bond, it is the ETF that is shining this year.

The Barclays New Gold ETF was launched at the NSE in March 2017 of 400,000 shares was listed at the NSE in March  2017 at a price of Kshs 1,205 per share. This was a relatively small number of shares for the new investment class. But their liquidity is assured as Barclays buys all the shares that are sold, paying investors two or three days later. 

The ETF is ideal for pension and insurance funds and other institutional investors, as well as for individuals and retail buyers, and gold does feature in the portfolios of a small number of high net worth individuals in Kenya. The ETF attracts no capital gains tax and is shariah-compliant.

Gold has traditionally been a hedge for times of turmoil, and with ongoing trade disputes between the US and China, UK’s Brexit, slowing growth in Asia and Europe, and uncertainties of debt levels and weaker currencies in Africa, gold represents a hedge, or point of safety that people turn to as a store of value.  Africa’s largest economy, South Africa is also facing its own capital flight and repatriation issues.

Gold has risen on the back of global demand for safety as the ETF represents the fractional equivalent of the price of real gold bullion. Gold is now ~$1,500 per ounce, up from $1,280 at the beginning of the year. The price has moved between $1,000 and $1,300 over the last five years.

As Nairobi investors have suffered paper losses with NSE share index prices dropping to ten-year lows, levels last seen in March 2009, the NewGold ETF has ascended this year by 21% and is up 25% since its introduction. That’s largely due to it being determined the global price of gold, not by local demand.

NewGold, which is the largest ETF on the Johannesburg exchange, is also listed and trades on share exchanges in Botswana, Nigeria, Ghana and Mauritius.

Sports betting on ice as Sportpesa and Betin shut down in Kenya

On the last Saturday of September 2019, top sports betting companies, Sportpesa and Betin, separately announced an effective end of their operations in Kenya.

Sportpesa posted a statement on their site saying that Kenyan tax administrators had misunderstood revenue generation in the betting industry  – and that the company would halt all brand operations in Kenya as a result. Earlier, Sportpesa management, without citing  numbers, had said that they had settled all matters with Kenya Revenue Authority (KRA), but have still been unable to obtain renewal of their license from the Betting Control and Licensing Board (BCLB)

Then last week on Wednesday, Sportpesa moved to lay off about 400 employees.

Meanwhile, Gamcode (trading as Betin Kenya) also issued a memo to all employees terminating their jobs as the company had not been operating since July 2019. They said they had been trying to resolve for three month’s as such all jobs would end on October 31.

Betin had several big media campaigns with Kenyan soccer star McDonald Mariga, who has unexpectedly stepped into politics and is now in the middle of campaigns to take up the vacant Parliamentary seat for Kibra constituency, following the death of popular MP, Ken Okoth.

By now, with the English Premier League on, local sports pages would have full-page colour advertisements of weekend and mid-week match betting odds and jackpot opportunities. Sportpesa also had significant spending in Europe sponsoring the Racing Point Formula One  team and Everton in the UK premier league and those teams still adorn  Sportpesa brands.

The claims of banning sports betting have been varied, with their destructive influence on young Kenyans, tax evasion and money laundering at different forums. Even a former Chairman of the Betting Control and Licensing Board, Kimani Kung’u, questioned whether non-payment and non-compliance with taxes was behind the freeze on the top betting companies.

In an interview with Radio Jambo in July, Kung’u said that the revenue of betting companies at the end of 2018 was between Sh20 billion and Sh25 billion and that there is no way that could have risen to Sh200 billion by mid-2019.


There have been three groups of companies: The group of 26 companies that were banned in July 2019 included: Mozzartbet, Sportybet SportPesa (Pevans E A Ltd), Betyetu (Oxygen & Gaming EA Ltd), Betin (Gamcode Ltd), Betway (Blue Jay Ltd), Easibet (Dreamcall Ltd), Betpawa (Gaming International Ltd), Betboss (White Rhino Ventures Ltd), Elitebet (Seal Capital Ltd), Dafa bet (Asian Betting & Gaming Ltd), Lucky 2 U, Cheza Cash (Sekunde Technologies), Palmsbet (Advanced Innovation Ltd), 1X Bet (Advanced Gaming Ltd), Saharabet (Sahara Game Technology Ltd), Bungabet (Galaxy Betting Ltd), Kick Off (Kick Off Sports Bar Ltd), Kenya Sports Bet, Eastleighbet (G&P Trading), and Premier Bet Ltd.

Those reportedly cleared later by KRA in July 2019 include Mozoltbet, East bet,  Lucky 2u, Eazi Bet, Kick off, Eastleighbet, Palms Bet, Bet boss, Betway, OdiBets, Mozzartbet and Ken Bookmakers.

Those xleared in August 2019 include Oyster, CityBet/EAF Galaxy, Shop & Deliver, Kareco, Playco, GrayHoldings/GameCo/Shabiki, NZ Mobile, Cheza Gaming, Hanstaunton Technologies/LottoCoLLP, and Zumabdu/Betlion.

None of the relicensed firms appears, so far, to have the impact and reach of Betin and Sportpesa.

Winners from the shutdown:

  • Moses Kemibaro has done a nice piece about the impact that the ban on Sportpesa and Betin has had on their web traffic and that of the other companies that have come to benefit from new betting activities, including Betika. He writes that “The biggest winners from Kenya’s sports betting armageddon are undoubtedly Betika, Odibets, MozzartBet Kenya and Kwikbet Kenya who have grown massively in terms of audiences and traffic during the last couple of months.”
  • The Internal Security Minister has said that Kshs 200 billion that was previously leaving the country through sports betting firms, is now being spent locally, boosting the local economy.

Losers from the shutdown include:

  • Media companies and newspapers: Gambling companies were among the top advertising spenders in the country up till this year. They would have about two color pages in all the newspapers, radio & TV ads, and several billboards across town. But as of this weekend, the newspapers are devoid of the advertisements except for small ones by Mozzartbet (for a 10 million jackpot for 50 shillings) and Betika (register and bet via USSD, with no data bundle required for a 100 million jackpot for 49 shillings)
  • The Kenya Premier League, which is limping since it lacks a top sponsor. Sportpesa had stepped in after Supersport had pulled out in protest at an ill-advised decision by the league to increase the number of participating teams from 16 to 18.
  • Telcos: Bettors and betting companies generated messages with every bet that incurred fees and bets were settled by mobile money payments. While companies are considering cards as a payment option, that is a minority that lags compared to mobile money usage.

EDIT Oct 11: 

Betin Kenya released a statement, saying that they, as a company, were fully tax-compliant, and that the betting industry had collectively paid Kshs 10 billon ($100 million) in taxes in 2018, but that the government had refused to renew its license, causing it to lay off its staff and shut down its retail outlets.

The Equity Story

Equity founder, Peter Munga, worked for the Ministry of Agriculture. He would go to work then come back home after a while, the same way most of us visit upcountry. His mother, among other villagers of Kangema worked in the tea farms.

They would get paid in cheques. There was no means to cash the cheques in the village. So they would wait for Munga to come visit home and give him the cheques. He would then go to cash them and bring the tea farmers their money the next time he visited home. This went on for a while until he felt the need to help his community.

Back then, to own a bank account had strict regulations. One had to have several referees to open an account, maintain a minimum balance of Kshs 10,000 and on top of that were storing bank charges. Withdrawal from an account took 7 days. Therefore most people preferred to store their hard-earned money at home, under their mattresses, where it was easily accessible.

Equity has had a few phases. The first one being 1984 – 1993. This is when Munga begun pursuing this dream to help his people. Within this period, the company made losses. But since his goal was more than just profit-making, he carried on.

The second phase which begun in 1994 had James Mwangi, the current Group CEO and MD, come in. Between 1994 – 2003, the company improved its business model and even begun mobile banking. That is going to people’s homes to offer banking services and financial education. It’s in this phase that they begun computerizing their operations.

The art gallery at the #equityat35 party had Equity staff explain to the guests the Equity history wonderfully.

The third phase (2004-2013), which they refer to as take off, had them become listed on the NSE (Nairobi Stock Exchange) and USE (Uganda Stock Exchange). In this phase, they incorporated mobile banking (phone banking) and were the first bank to introduce agency banking. They went on to win awards among them being The Best Bank in Kenya, The African Business of the Year and The Global Vision Award in Microfinance. 

Today, Equity is also listed on the RSE (Rwanda Stock Exchange). The bank owns branches in 9 African countries; Kenya, Uganda, Tanzania, Rwanda, South Sudan, DRC, Ethiopia, Zambia and Mozambique. Their goal is to become a Pan-African Bank with 10 countries under their sleeve by end of the year. In the beginning, their main competition was mattresses and banks, but today, their main competition is cash, fintech and telcos. 

They are big on community social responsibility (CSR), hence the Equity Group Foundation. This has been evident through their Wings to Fly program which has over 16,000 beneficiaries. Equity runs FIKA (Financial Knowledge for Africa), which is a free program that equips the beneficiaries with financial management skills. The Foundation finances the Equity Afia Clinics which are run by the Wings to Fly graduates. The clinic currently has branches in Ongata Rongai, Buruburu, Kawangware, Kayole, Thika, Ruiru, Nyeri and Nakuru. 

A guest post by @themkare 

SWVL and Little shuttles shut in Kenya

Unique shuttle services by SWVL and Little Ride were ordered to halt operating this week by Kenya’s transport regulator, the National Transport and Safety Authority.

Excerpts from a recent  column about the services:

SWVL has interesting routes all over Nairobi from residential areas to business hubs. Examples are for people who make daily commutes from Ruiru or Kahawa Sukari to offices in Westlands, or others who live in Kitengela and work in Upper Hill. Traditionally they would have to use two (matatu) vehicles and walk across the central business district (CBD) which they only pass because it is where most bus routes terminate. 

 But now, enticed with free introduction rides, they can get to work in half the time, by booking a ride in advance on an app, and paying a flat fee of Kshs 200 per journey. Some get to ride in comfortable shuttles with Wi-Fi, not the old, creaky matatus, that serve many ‘posh’ areas of Nairobi. Little Shuttle has now branched into long-haul services with several daily trips between Nairobi and Nakuru.

The news was first revealed by Kamal Budhabhatti, Chief Executive of Little in one of his regular email updates to customers of Little. He noted that the shuttles they used were from partners who were fully licensed  but that the NTSA had said it was not the correct license. 

He asked that the NTSA do dialogue with them as a technology companies trying to change public transportation through a popular service that had run for almost a year and which has been very popular. He added that when Safaricom launched M-Pesa there was no regulation on mobile  money and that the Central Bank of Kenya was able to come up with a legal model afterwards. He also wondered if the decision to stop Little was instigated by pressure from the public transport cartels.

On the SWVL side, the General Manager, SWVL Kenya, Shivachi Muleji, stated that: We have been engaging with the government and are still in the process. There have been a few milestones and we are happy with the progress. We’ll remain committed to ensuring that we build a business that’s fully compliant.

Government Initiatives: Meanwhile the Government’s plan for Bus Rapid Transit system and a Nairobi Metropolitan Area Transport Authority (NaMATA) are still at the drawing plan stage. It’s also been a few years since Google and Equity bank tries to reorder the finances of the public transportation sector.

Cashless pushes around Africa

Nigeria: The Central Bank of Nigeria set a tariff of 3% for deposits and 2% for withdrawals of  more than Naira 500,000 (equivalent to ~$1,380) from individual accounts. They also set a tariff of 5% for withdrawals from corporate accounts, and 3% for deposits, over Naira 3 Million (equivalent to ~$8,280) from corporate accounts. This is in the states of Lagos, Ogun, Kano, Abia, Anambra, and Rivers States as well as the Federal Capital Territory. This is to promote cashless transactions. (Source)

Uganda: The Bank of Uganda has banned merchants from imposing surcharges for the use of electronic card payments and also the setting of minimum and maxim amounts that can be transacted on cars. In addition, they have asked banks in Uganda to harmonize tariffs that they levy on customers of banks for when they use each other’s ATM’s.

Kenya: Today is the deadline set by Kenya’s Central Bank after which the old series of the Kshs 1,000 (~$10 notes), bearing the image of the first President of Kenya, will cease to become legal  tender for transacting in the country.

Tanzania: Mobile app lender Tala suspended issuing loans in Tanzania. The company which claims to have lent over $1 billion to 4 million individuals will continue in Kenya which they say, with 3 million customers, is a critical part of their global business, and where they are piloting new financial education services. California-headquartered Tala also has customers in The Philippines, Mexico and India, and is backed by investors like PayPal, IVP, and Revolution Growth.

Zimbabwe: The Cashless push has gone awry in Zimbabwe where the Government has now banned Ecocash agents from making cash deposits and withdrawals for customers as these are now happening at values that are at variance. This has resulted in a situation where $1 in cash is worth ~$1.50 in digital money.