Category Archives: ideaexchange

Large Bank Engagement Programs: Nigeria and Kenya

How do large banks engage with the public? Some have programs that go beyond the usual corporate social responsibility – and which go out to address unique national challenges or provide opportunities to large segments of the population who may also be customers of the bank

Kenya scholarships and training.

In Kenya, large banks have some education programs, offering scholarships and support to gifted primary and high school students in different counties. The largest of these has been Equity Bank, which has its “Wings to Fly” leadership program. In nine years, Wings to Fly has given over 15,000 scholarships to needy or financial challenged pupils, 8,000 of who attained the university entrance grade after secondary school.

There are also other entrepreneurship forums, training programs and business clubs.

KCB has a KCB2Jiajiri, a Kshs 50 billion program started in 2016 that aims to benefit 500,000 entrepreneurs in 5 years, thereby creating at least 2.5 million direct and indirect jobs. 

Barclays

Barclays Bank of Kenya launched Ready to Work, a free online training program to help college students and recent graduates get “job-ready” for a world of work. The bank also has a business club founded in 2003 that has supported over 9,000 companies and whose entrepreneur members have traveled to network and trade in over ten countries.

Nigerian bank do mega events:

Access Bank: In December, Access Bank had a huge year-end musical event.

The Bank also hosted a “Born In Africa Fest,” a musical event that was attended by over 25,000 guests.

Ecobank: The bank has a recurring fintech challenge to find financial technology companies with solutions and models that can scale across Africa.

GT Bank

GT Bank stages an annual fashion event called the GTBank Fashion Weekend that brings together fashion and business leaders from around the world to create the biggest fashion experience in Africa.

They also aim to showcase African art in different countries.

UBA: Unique among the banks is UBA, who in conjunction with their Chairman, and his Tony Elumelu Foundation have just launched the fifth year of a $100 million entrepreneurship challenge a philanthropic program that aims to find, train and fund 10,000 African entrepreneurs. So far, over 4,470 entrepreneurs have benefited, and, through UBA in Kenya, over 350 local entrepreneurs in Kenya have received the seed capital of $5,000 for their businesses, training and mentoring, and many of them have been to Nigeria to attend an annual congress of entrepreneurs.

The number of applicants has been increasing each year. Last year there were over 150,000 applicants, and this year applications are all being done via TEFConnect, which is billed as the largest digital networking platform for African entrepreneurs.

The TEF Entrepreneurship Program is open to citizens and legal residents of all African countries, who run for-profit businesses based in Africa that are no older than three years. The deadline for applications submission is March 1, 2019.

Zenith Bank

Zenith Bank held “Style by Zenith,” a flagship Lifestyle, beauty, fashion, accessories and entertainment fair, in conjunction with Fashion One, in the last weekend of December 2018.

Idea Exchange: Bloomberg and Reuters financial journalism training

Bloomberg: The Bloomberg Media Initiative Africa Financial Journalism Training program has resumed. After four years of training financial journalists in Kenya, South Africa and Nigeria, the BMIA now moves on to Ghana, Zambia, Tanzania, Cote d’Ivoire and Senegal.

In the first part of the new phase, participating universities are the Ghana Institute of Journalism and University of Ghana Business School in Ghana, and the University of Zambia and University of Lusaka School of Business in Zambia. That does not mean journalists from other countries are excluded, but they have to travel to physically attend classes at the local universities,  that run from January 2019 to June 2019, for two weeks in each month.

AMIB50 chart by Bloomberg

The program is worth about $22,000 and is greatly subsidized by Bloomberg Philanthropies and the Stavros Niarchos Foundation, with the students not expected to pay more than $250. Students must also have a laptop computer and commit to attending all the classes. For the duration of the class, they also get prized access to the Blomberg terminal, an invaluable information resource for researching global financial markets. The deadline for applications is November 30. 

Reuters: The Reuters Journalism Training Programme – EMEA targets early journalists, with not more than three years experience, to undertake a nine-month training program, that includes with one month in London, and on the job training in bureaus in Africa, Europe and the Middle East.

Applicants must have an interest in issues that affect companies, markets and economies and there seems to a preference for journalists with experience in areas like banking, financial analysis, accounting, law or computer science. The deadline for applications is November 30.

After Office Hours with Kris Senanu at the Nairobi Garage

Last Friday, Nairobi Garage hosted an “After Office Hours ” chat session with Kris Senanu, the Managing Director- Enterprise at Telkom Kenya. He is also a successful venture capitalist with diverse investments and is also a judge on KCB Lion’s Den, a televised local version of the Shark Tank show, in which entrepreneurs pitch for investors to fund their companies.

Excerpts from the Q&A  

Balancing Work and Investments: He has a fun day job at Telkom, but he’s an insomniac and is able to do investing work from 6 PM to midnight. He started investing as a “terrible hobby” when he was 21 and he has a high appetite for risk.

He’s Not Just Invested in Tech: “Investments depends on what is the value to me, the community, country and profitability.” He started his first business Yaka Yeke which was about bringing West African fashion, which he liked, to East Africa. Later he got a partner and started Mama Ashanti restaurant because he wanted to eat West African food and saw there was a demand for that.

He doesn’t own any company. He created Blackrock, with his partners, which he doesn’t manage, to consolidate and oversee his investments. They take a maximum of 33% of equity and let the other shareholders deal with the heavy tasks of managing companies while they provide guidance.  He puts in money based on plans, and milestones and has people who check on those. While he may go serve drinks at one of their bars, he does not dwell on the daily numbers but will read reports late at night.

Funding Decisions: He said a key thing for any entrepreneurs seeking funds from investors was to know what type of money to seek. It was not about “do I need equity or debt?” and what amount to ask for, but also about what you need at any particular time – one is for operational expense, the other is for long-term expense. if you go for equity, there is some money that is good for you, and others to avoid – and some companies get money and right from month one of the new funding, the business or environment changes.

He invests $10,000 to $500,000, and takes on riskier investments – and if it is an area he can add value and scale, it will get investment. He also looks at how passionate an investor is  “are they willing to do this for 10 years or is it just a side-hustle?”. Spreadsheets are powerful tools that guide, but also confuse with numbers that can obscure real basic business. Investment decisions take up to six months as they use evaluate, build relationships with, and get to understand the entrepreneurs.

Scaling Companies:  His main challenge in the last few years has been scalability – as he says there are good businesses around, but they don’t have the ability to scale. While many do okay in a single market or single country, when numbers are good, investors want to see the businesses go multi-market or multi-country.

He said Nairobi has a lot of venture capital, angel funders, and private equity investors – all with money and who are willing to invest in businesses, but that the lot of money is chasing the few businesses that show scalability, and the ability to be sustainable and profitable in the long-term.

Foreigners Getting Start-Up Funding in Nairobi: On this, he said capital will flow to places and spaces where the capital feels comfortable, and entrepreneurs in Nairobi are going to have to make people more comfortable investing big money with us – and to change that narrative about “capital flowing to foreign faces in local spaces.” He said that it could be a case that some local businesses seeking investors were not fully baked and were perhaps at a stage where they were better off going of debt (convertibles/loans) rather than equity funding. He mentioned an episode of the Lion’s Den where someone mentioned Cellulant in a way that offended him. He said that many managers at Cellulant were former colleagues of his and he had watched the company grow for many years, overcoming many tough times as it ventured across Africa. He said entrepreneurs have to, know when to raise capital, know what to ask for, and that Cellulant was now attracting big funding rounds because of their strategic funding decisions and people have to get better at that in Nairobi.

His Work Philosophy: “if you work your whole life for money that is sad; you have to find purpose.” His is to invest in someone else’s visions and help them grow their companies – At Swift, he was employee number 7 and the company grew to 150 staff, while at Access Kenya, he was employee number three, after the founders. He endeavours to grow businesses, create employment, make profits, then exit and move on to the next one.

Night Club IPO? “I have a philosophy is to create one million jobs” but he Knows that is not going to happen through companies, but if he can enable, through his cash, other entrepreneurs to create 10 or 20 or 50 jobs, he will do it. From 2009 he was saving $200 per month, along with some friends who planned to attend the World Cup in South Africa. But he really had no interest in watching soccer and after his wife persuaded him to meet with a young entrepreneur, he ended up giving him the money he had set aside for the World Cup. “I liked the guy, his swag and ideas.” That young man was Amor Thige and the idea was to put money into a nightclub called Skylux Lounge. It later became the top club in Nairobi for several years and changed the nightlife scene.

The Skylux experience led him to invest in another group Tribeka which went on to open five nightclubs – Tribeka, Rafikiz,  Zodiak, Fahrenheit and Natives, and they later added Ebony and Marina Bay at English Point, Mombasa. At its height the group had a turnover of Kshs 87 million a month, rounding out to a billion shillings a year – but what mattered to him more was that the chain was employing 472 people, which was more than the 380 jobs at Access Kenya, a listed company. They also considered doing an IPO for the group, seeing as Kenyans who liked drinking would also like to own a piece of the company, and some of their clubs cost as much as Kshs  60 million to build out. 

Where to Find Investment Information and Data? He said there’s so much diversity in Nairobi and cited a few conversations in sports bars about agribusiness that are leading him into investing in macadamia nuts. He is now doing research, scouting for companies and the best places to grow macadamia over the next few years – “it all depends on who you hang with and the conversations you are having”. He said you can get data on private companies from the right people who have no reason to embellish data, and added that even public companies in Kenya and South Africa audited by top firms are later found to have cooked their books.

Why Telkom Kenya?: He said he entered the telecommunications business while there was a giant monopoly, the Kenya Posts & Telecommunications Corporation (KPTC) – that had low-quality, high prices and poor service – and which constricted the growth of communications at the time. So when Access Kenya was sold to Dimension Data he saw working to revamp Telkom Kenya as his next challenge – to grow a viable challenger that disrupts, gives choice and opportunity in the era of another dominant company (read Safaricom). He sees this as his national service to give back to the people of Kenya, through the government, and the ecosystem, and that while people in the room may not appreciate it now, they will in five years.

Decision-Making:
  • Most difficult decision; firing the smartest person at the company, but who had the worst attitude. it was tough but it was for the greater good of the business.
  • Best decision; sticking to technology. Tech brings change and motion process every day, He’s never bored, he wakes up to have fun. It started while he was selling clothes and Wangari Mathai’s niece asked him to join her at Swift Global and use his sales skills to also sell devices and he’s never looked back.
  • Kris Senanu on his worst decision/regret; not having children earlier.

CMA Kenya launches University Financial Literacy Competition

The Capital Markets Authority of Kenya formally launched the 2018 Universities Challenge at KICC in Nairobi on September 25, which aims to equip young people with investment skills and nurture a culture of financial literacy and investing and saving for the future through participation in capital markets.

The 2018 edition of the Universities Challenge, which runs from September 25 to December 31, will feature 6,015 participating students from 37 local universities. They will go through five stages of elimination through testing their financial literacy and knowledge, starting with an online exam, followed by a stage dubbed a “scavenger hunt”, then they will make presentations at universities followed by presentations to CMA staff. There will then be a grand finale event in Nairobi where twelve top students will get to pitch to investment stakeholders, CMA staff and representatives of all universities in the challenge.

Speaking at the launch, CMA CEO Paul Muthaura, said that the average age of entrants was 23 years and that this was as a result of them targeting ongoing students and make them young investors because of the long-term nature of capital markets investments. Also that the use of technology was part of the CMA’s engagement process of expanding financial literacy as well as to transform the visibility of the authority through social media. He added that the CMA was in the middle of implementing a ten-year master plan and had won several awards for being among the most innovative market regulators in Africa.

The winner of the 2018 inter-university competition will get a grand prize of a Kshs 150,000 (~$1,500) portfolio of listed securities of their choice and the university where the student comes from will get investment textbooks worth Kshs 75,000 for its library. Three other winners will get fully paid 3-day educational trips to observe a securities exchange and capital markets regulator in Africa.

Participate in the CMA University Challenge 2018

What can shares worth Kshs. 150,000 do for your life? How about a trip to a foreign country?  How about rewarding your university with books worth Kshs.75, 000? And what about being a guru in investing in the capital markets?

This is what is at stake for the winner of the Capital Markets Authority’s University Challenge 2018. The Challenge is open for undergraduate university students in universities that have confirmed participation. Register for this Challenge from 8th August 2018 to 22nd August 2018. Check the CMA website and social media pages for further details on the University Challenge registration process.