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Money: More than a medium of exchange, a store of value

By Meresia Aloo | May 15th 2021
Chacha Nyaigoti Bichiang'a Personal Financial expert and Coach. He is also the author of the book Mastering your money.[Standard]

The subject of money is emotive and controversial, especially among Africans. It is the number one cause of conflicts in families and institutions.

The big question however is: Why do many people experience many problems with money? Personal financial coach Chacha Nyaigoti Bichiang’a argues that the main root cause of financial problems is lack of financial mastery and literacy.

A past survey conducted by the World Bank showed that many people around the world are financially illiterate but the numbers are high in low-income countries. The study adds that low level of financial literacy has led to adverse financial outcomes. Even so, society is still struggling to come to terms with the myths and misconceptions people have about the concept of money, which emanates from the way they were brought up.

“The way we were brought up when young, relating with parents, school system, religious groups, and mass media are all agents of socialisation that have made us develop certain beliefs about money,” said Bichiang’a, a personal financial coach and author of mastering your money.

To take stock of the evidence, Kenya has well-trained financial experts yet it has a lot of controversies concerning money. Talk of money-laundering, high debts and poor economic growth that forces investors to rethink their plans. This has something to do with poor financial management.

Churches have fallen victim of disintegration due to the impact brought about by money. For a long time, money has been defined as a medium of exchange. However, over the years, money has undergone a transformation.

Right from barter trade, metallic coins such as silver and gold, to paper money. Now we are talking about digital currencies that can also be referred to as e-money. We can now conduct business using electronic means such as electronic funds transfer- M-Pesa, and even pay our bills using digital money.

The other form of currency, which has been introduced in the country, but has not been fully accepted is Cryptocurrency. A good example is Bitcoin which even the Central Bank of Kenya has not allowed for widespread use. Money therefore can be said to be more than a medium of exchange but a store of value.

This means that with Sh1000, you can decide to buy shares at the Nairobi Securities Exchange. “You simply store the value of money in the shares. So, when you buy 100 shares of Safaricom using Sh1,000, that means the value of your money is in the shares that you have bought,” said Bichiang’a.

According to Bichiang’a, money can also be an idea. For one to make money, one needs to come up with an idea which can generate money. And this is where creativity kicks in. Wealth can be determined by how much one is able to generate.

He said even M-Pesa money transfer platform itself was an idea which has made Safaricom one of the biggest companies in East and Central Africa. “By coming up with an idea, it means the idea can now fade and earn income which can then be stored in properties or in valuable means of owning wealth,” Bichiang’a said.

Meresia Aloo


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