NAIROBI, KENYA: Kenya accounted for more than half of funds pumped into the region by private equity (PE) and venture capital firms.
A new report shows that Kenya received 59 per cent of the funds that private equity firms pumped into the region between 2013 and 2018.
The report by the Africa Private Equity and Venture Capital Association (AVCA) indicates that there were 110 reported deals during the five years valued at Sh130 billion.
Most of the money was invested in the consumer goods and technology sectors. Reports have in the recent past indicated that investors might be shifting their preference in East Africa, with countries such as Rwanda and Ethiopia becoming key competitors for investments targeted at the Eastern Africa region.
This is on the back of reforms that the two countries have been implementing.
The AVCA data, however, shows that Kenya is still ahead of the pack, with Ethiopia and Uganda tying at number two and accounting for 11 per cent of the PE investments made between 2013 and 2018.
“Pan African, sub-Saharan, and country-specific funds are increasingly raising and deploying capital in Kenya. Pan African firms have also used their Kenyan offices as bases from which to scale up across the East African region,” noted the report.
“From 2013 to 2018, 89 per cent of the PE deal volume reported in Kenya was concentrated in consumer and technology-related sectors. This underscores the enduring strength of both the consumer and the technology stories in the country.”
AVCA released the research on PE deals yesterday in Nairobi ahead of a three-day international conference for private equity and venture capital players which starts today.
The preference for Kenya by private equity firms was attributed to the resilience in the country’s economy, political instability, investments in areas such as infrastructure as well as ease of access to other East African countries.
“East Africa as a bloc is probably the most integrated of the economic blocs on the continent. Kenya is the largest economy and has the opportunity to branch out to other economies in the region,” said Catalyst Principal Partners CEO Paul Kavuma.
Centum CEO James Mworia noted that the investments to the country could grow if there were enough ‘bankable opportunities’.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.