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Dr Pesa
Many people think of investment as a preserve of the uber rich.

Dear Dr Pesa,

I am a 28-year-old single mother of two. I run a vegetable kiosk and in the past one year I have been able to save Sh100,000. I am planning to invest the cash to multiply it but I have no idea where to begin. I am also scared I might get swindled by some shoddy investment schemes. Where should I invest?

Many people think of investment as a preserve of the uber rich. Or if they think they have a chance at investing, they imagine that their only option is getting into business, even if they’re not entrepreneurially inclined.

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Starting a business isn’t easy, and requires a lot of commitment in terms of money and time. Research has shown the average Kenyan business will break even within six months to one year.

Another set of statistics has found that most start-ups don’t even make it to their first birthday, and of those that do, nearly half don’t make it past three years of operation.

These numbers aren’t the most encouraging, so it should come as good news that investment isn’t only for the rich, nor is it limited to launching a business.

Diana Nyakio of ICEA Lion Group says there are several dynamic investment options available to all cadres of investors, with the returns largely dependent on the level of risk.

What matters is getting the right advice to find the investment vehicle that suits you. These are some of the options available if you – or your chama – are looking to invest Sh100,000.

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The options

1. Government debt

Loaning the Government money tends to be one of the safest investment options available in the market. While there are no guarantees when it comes to investing, buying Government debt, through options like Treasury Bills, tends to be as close as you can get to a low-risk use of your cash.

Initially, you had to have a minimum of Sh100,000 to buy a Treasury Bill, but you can now invest with as little as Sh3,000 through M-Akiba, which raises funds for infrastructure development.

To invest in a T-bill, you can either open a central depository system (CDS) account with the Central Bank of Kenya, or approach your bank for the service.

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If you go through a bank, you can expect to pay an average commission of 0.25 per cent of the amount invested, with the minimum charge often being Sh1,000.

You’ll need to invest at least Sh100,000 per time; you can top up the amount in multiples of Sh50,000. Anticipate a withholding tax of 15 per cent on your interest earnings. The M-Akiba bond, however, is tax free.

The return you can earn on a 91-day, 182-day or 364-day T-bill is available on the CBK website, centralbank.go.ke.

If you want to make a longer-term investment, you can consider a Treasury Bond, which are offered for up to 30 years. Typically, you’ll get interest payments every six months, with Central Bank auctioning the bonds on a monthly basis. The Bank’s website provides details on what’s available.

2. Saccos

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You can grow your money by identifying a well-run and properly regulated Sacco, and being a part of its membership. Some Saccos limit their membership to employees or industry professionals. However, there are many good ones that are open to anyone.

Do your research, though, to ensure that you don’t invest in an institution that has poor management, hasn’t paid any dividends in decades or can’t quite prove how it earns money for its members.

Most Saccos allow you to access up to three times your savings within three to six months. Their loan interest rates tend to be lower than those offered by commercial banks. Additionally, you get to make money off those taking loans through the annual dividends shared out among members.

3. Unit trusts

Unit trusts work best if you’re looking to grow your money steadily for a long-term project. Unit trusts bring together money from a pool of investors, and put it in shares, Government paper or money markets, and then split the proceeds among the members of the pool, according to their share of the investment.

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You can invest in a unit trust through any one of the regulated investment banks in the country, and pick the option that’s most comfortable for you. The safest option tends to be a money market unit trust, where returns vary on a daily basis, currently ranging between 6 per cent and 10 per cent. You can see the returns different institutions offer in the daily newspapers.

Most unit trusts options will allow you to start with Sh100,000, though you can keep adding money into your pool on a monthly or quarterly basis.


The Nairobi Securities Exchange (NSE) gives you the chance to buy into a business you believe in and that’s showing a positive growth outlook.

You’ll need to buy a minimum of 1,000 shares. The beauty of buying into a listed company is that you get to own a piece of a business that you admire. Before you buy into a business, however, seek professional guidance and read widely on its financial performance.

While you can’t predict the future of a share price, there are some indicators you can look at that will help guide you into making a wise decision.

You’ll make your money by either selling off the shares at a higher price in the future, or through years of earning dividends, which are a share of the company’s profits.  

Investment Saving money Dr Pesa

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