The Best Investment Options for Young Adults in Kenya

If you are a young adult who just got out of college and bagged an entry level job, the last thing on your mind would be looking on investment options.

You are probably living life with a carefree attitude without a worry on how you are spending your income.

Investments come in different forms, including business, stocks, bonds, pensions, private equity, unit trusts, and real estate. All you have to do is find a suitable one and start with the resources you have.

Fortunately, deciding which types of investments are best is not as hard as it may seem.

Here are some of the best investment options for young adults:

Mutual Funds (Unit Trusts)

These operate like chamas. The returns are then distributed over certain periods, such as monthly or every six months.

Kenya has different funds available including:

• Money Market Fund
• Fixed Income Fund
• Balanced Fund
• Equity Fund
• Bond Fund
• Managed Fund

Read Also: Money Market Funds Vs Savings Account: Why You Should Save in a Money Market Fund

Unlisted equities (Chamas)

Such securities are issued usually by smaller or new firms who cannot or do not wish to comply with the listing requirements of an official exchange.

These include things like family, friend or brother’s business. You can also invest in these through chamas. Entrepreneurs looking for equity for their business sometimes approach chamas.

Read Also: Financial Planning for Young Kenyan Adults and Why It is Important

Chamas work in a way that resources are pooled together with that of other investors where you contribute money and then that money is invested into a certain investment product by the fund manager.

M-Shwari

This is a paperless mobile banking service that is offered through M-Pesa a mobile money transfer service by Safaricom Kenya.

M-Shwari has certain features;

• Enables you to open and operate an M-Shwari bank account through your mobile phone, through M-PESA, without having to visit any bank to fill out bank account opening forms.
• It provides you the ability to move money in and out of your M-Shwari savings account to your M-PESA account at no charge.
• It gives you an opportunity to save as little as Ksh.1 and earn interest on your saving balance. This cash is moved into the savings account using your handset via the M-PESA Menu.
• Enables you access micro-credit product (loan) of a minimum of Ksh.100 anytime and receive your loan instantly on your M-PESA account.
• The daily average deposit balance will earn the customer interest even with the minimum balance amount.
• M-Shwari has competitive interest rates on savings, better than other banks.
• The minimum amount you can deposit in your account is zero.

M-Shwari also has a locked savings account option.  The funds saved on the M–Shwari Lock Savings account will be kept in the account until the maturity date; this maturity date is determined by the customer upon opening the account and ranges between one and six months. Customers can make a micro deposit into this.

Read Also: How the 52-Week Savings Challenge on M-Shwari Bought me a Ticket to Europe