NAIROBI, Kenya, Apr 24 – The Vision 2030 Delivery Secretariat is looking to tap into the 300,000-strong investment group network in Kenya to accelerate some of the flagship projects.
Vision 2030 Delivery Secretariat Director General Mugo Kibati said such investment groups, often referred to as chamas, need to make a more aggressive push towards investing in Vision 2030.
“We need entrepreneurs in the real sense of the word, to be part of delivering Vision 2030. We need the private sector to be ahead of the government. Vision 2030 cannot move in incremental steps. To move from third world to the next level is a quantum jump,” he said.
Kibati was speaking during the re-brand launch of the Kenya Association of Investment Groups (KAIG) that serves as the umbrella organisation for chamas in Kenya and the Diaspora.
The association’s chairman Patrick Kariuki said with chamas holding a capital base of least Sh300 billion, the sector has great potential to drive Kenya’s ambitious blueprint goals forward, adding that his organisation is already educating its members on how to become viable investors.
“Building capacity is being done through the chama of chamas, which the Association has promoted and was a request by our member groups who wanted to pool resources, so that they can invest in the bigger projects in Kenya and East Africa,” he said.
Some of the larger KAIG members have gone on to invest in infrastructural and property projects such as TransCentury Limited that recently embarked on an ambitious program to triple the volumes carried by rail in Kenya and Uganda by Rift Valley Railways with a Sh27 billion investment over three years.
The Amalgamated Chama Limited, another KAIG member, is also to commence construction on its 400-acre Kilimanjaro Resort in Oloitokitok, which has been dubbed “the Vegas of Kenya without the sin.”
Kariuki said that KAIG has identified 8,000 small chamas to which the Association will provide free education on investing, in collaboration with its corporate partners in the banking, IT and insurance companies.
“Five years from now, I see chamas conservatively with resources of greater than a Sh1 billion, because there are very many youth and student chamas and as they come into the job market and earn money they will invest more in their chamas and grow,” he said.
The Youth Enterprise Development Fund (YEDF) is one institution that has chosen to tap into the growing section young entrepreneurs, chamas and Saccos lending primarily to the 18 and 35-year age bracket.
The YEDF is an attractive option to such groups that often find it impossible to size up against most banks’ requirements to receive funding.
A move by the government to further engage the youth in the Public Procurement Act, YEDF Chairman James Gitau Singh, said is a step in the right direction to empower younger population to seek alternative avenues of raising capital.
“Twenty percent of all government funding will be limited to the youth and the Act is being changed to that. To ensure that this is strictly followed, all government officials will be required to enter into performance contracting and included will be a provision that shows how they interacted with the youth,” he said.
Since its inception the YEDF has disbursed over 150 loans to youth, with the government so far released Sh1.75 billion to the Fund.