[Column] Bob Koigi: Making economic and employment sense with investment groups
One in every three Kenyans is in an investment club which translates to over 300,000 recognized ones in the country, with a combined asset base of $300 million. Now that is a figure even pundits and industry players will tell you is a force for any economy. It represents three percent of Kenya’s GDP earnings and competes with other lucrative sectors like mining. Yet the journey to the group’s stardom has been a cocktail of impediments and success in equal measure.
For what started as simple consolation gatherings in the 80s and 90s when the country’s economy was struggling, prompting people to come together to endure the harsh economic conditions and now having metamorphosed into financial behemoth with multibillion investments in stock markets, real estate, energy, retail among other sectors. Little wonder then that financial institutions who traditionally would not touch any of this clubs in their financing spree have now even invested in unique products for the investment groups.
Even more heartwarming is government's interest in partnering with these investment groups to raise funds for development projects. It has surely been a journey of a thousand miles.
But the greatest and lasting impression these clubs have marked in our society is giving hope and jobs to our people at a time when unemployment has hit unprecedented highs.
Data released by various institutions indicate that each year over 800,000 youth are ripe and qualified to join the job market. Yet the market is already saturated and can only accommodate 50,000 of them. A paltry 50,000. This has added into the societal cancer that has seen about 54 percent of Kenyans out of jobs. To put it in perspective, five out of ten qualified and trained Kenyans are unemployed. And therein lies the problem.
The situation is so dire that the World Bank has called it a ticking time bomb, a disaster waiting to happen. And the signs are now manifest. What with crime that is spiraling out of control which is being orchestrated by the unemployed mostly the youth.
Yet similar studies have pointed into investment groups as a quick intervention. And these solutions have been manifest. What with youths in these investment groups creating enterprises that are employing a dozen more, or pooled resources that are keeping our people busy in managing these investments. They don't have to move from office to office in search of elusive jobs.
The investment clubs are proof enough that we can spur our economy to new highs and take care of our people at the same time. That, according to social economists is the only way a country will feel the effects of an economic growth.
For nowhere, ever, did an economy move from poverty to wealth from the top down. Take-off came when businesses started doing better and growing in a thousand and a hundred thousand homes and hands. Only then did the economy take off.
And the fastest way to do that in almost all the places where it happened was in pooling together resources. We welcome your feedback on what else we need to cover.
Multiple award winning Kenyan journalist Bob Koigi is Chief Editor East Africa at Africa Business Communities