‘Don’t build your upcountry home with retirement savings’

Mr Simon Wafubwa is the CEO and Founder of Enwealth Financial Services Limited.

Simon Wafubwa, the founder and CEO of Enwealth Financial Services, spoke to Wangeci Kanyeki on the need for inculcating a savings culture at an early stage and a number of related issues

How is housing factored into the retirement plan strategy?

Housing is part of the critical pillars of social security at retirement. Most Kenyans do not have good housing, which is a major contribution to human dignity, at retirement.

Should a city dweller build a house upcountry (ushago) with their last pay cheque?

No. Because building a house requires a huge amount of money, they may end up spending all their savings on putting up the house. This leads to frustration and eventually the person can die shortly after retirement.

It would be prudent to put up a basic structure that will not deplete their retirement benefits. Most retirees face an empty nest syndrome, where most of their children have moved out of the home for work purposes.

The city dweller should build a house that can accommodate him or her and perhaps just one extra room in case the children visit. As they get their monthly pension, they can gradually make improvements on the house to the level they desire.

At what point should one start planning for retirement?

Retirement should start with your first pay cheque. We must do away with the culture of consuming everything now and hoping that tomorrow will take care of itself. The reality is that tomorrow is coming and you must plan for it. The earlier one begins the better.

How does pension savings in Kenya compare with those in developed countries?

According to the RBA, the industry has a portfolio of Sh900 billion up from Sh40 billion in 2002. The exponential growth has been mainly driven by good legislative framework and supervision by the RBA. However, we still have a high rate of consumerism, leading to a poor savings culture with women saving more than men. Women are cultured to save and are more careful with expenditure.

Enwealth Financial Services Limited was previously operating as Liberty Pensions. What necessitated the rebranding?

The change was in line with the company’s strategic focus to offer a dignified retirement life for all in a much better way while upholding the same values of integrity, passion and excellence.

What products do you have for the Small and Medium Enterprises or informal sector employees?

We have designed an SME Retirement Fund which enables unsalaried people to contribute from as low as Sh300. The scheme is registered by the Retirement Benefits Authority (RBA) and has an approved tax exemption from the Kenya Revenue Authority.

What is being done to protect the diaspora investor from getting conned by relatives when buying houses and properties locally?

A lot more has to be done in terms of providing credible information to property buyers to enable them undertake due diligence. In addition, we need stringent legislative framework within the property market to safeguard the interests of various stakeholders. We have developed the first ever Expatriates and Diaspora Retirement Fund that is registered with the RBA through which Kenyans in the diaspora can save locally through a credible registered retirement scheme while enjoying high returns.

Why did you choose to focus on pension schemes business though your training is in Bsc Actuarial Science, Maths and MBA Strategic Management?

Having worked with pension schemes for over I5 years in Kenya, Nigeria, Tanzania and Uganda, I realised that Kenyans are retiring without dignity and quickly pass on because of poverty. Enwealth has crafted social security financial products and services which allow members access to monthly income and healthcare insurance at retirement.