Happy new week.
The Hustler Fund is launched
Kenyans borrowed an average of Ksh 17 million an hour through the Hustler Fund on the first day. As of Saturday last week, the amount disbursed was Ksh 1 billion. This amount is expected to rise in the coming days.
President William Ruto launched the fund on Wednesday last week in effort to provide State-backed concessional loans to small businesses that have struggled to access financing from mainstream banks.
“Average number of transactions from the kitty wasSh500 per second on Wednesday, dropping to 190 per second on Thursday,” Cooperatives and MSMEs Cabinet Secretary Simon Chelugui said yesterday.
How the Hustler Fund Works
The approved loan is sent to your mobile money account but 95% of teh money is deposited into your money wallet while 5% per cent of it in their savings account.
The loan has an annual interest rate of 8% calculated per day
The loan repayment period is 14-days
customers who have not refunded the facility in 14 days get an extra 15 days to repay and if the loan is still not settled, the interest rate increases to 9.5% per year.
There is no CRB listing under the fund, which means that default has no impact on the debtor’s credit score with other lenders.
CAPITAL MARKETS
Centum bought Ksh 1.9bn Eurobonds to lock in returns
Centum Investment Company bought Ksh1.9 billion Eurobonds that are giving it an average return of nearly 14%, taking advantage of the high returns on offer in sovereign debt to boost its investment income.
James Mworia, the chief executive, explained to the Business Daily that the bulk of the bonds is Egyptian securities but that it has also taken up some of Kenya’s Eurobonds that trade on the London and Irish stock exchanges.
Companies and individuals can invest in Eurobonds in the secondary market, with this option becoming increasingly attractive due to higher yields and new platforms that are opening access to offshore markets.
Absa Bank launches offshore investment services
Absa Bank Kenya has launched an offshore investment offering targeting affluent individuals seeking to diversify their investment portfolio beyond the local market.
The new service will be managed by Absa Asset Management Limited (AAML), a wholly-owned subsidiary of the listed bank.
“We are leveraging our global footprint, market intelligence and expertise to set up a well-structured offshore investment infrastructure that not only meets regulatory standards across different markets but also resonates with the needs of clients looking to invest their capital with minimal risk and assured returns,” Yusuf Omari, Absa Bank Kenya’s interim CEO
CYBERSECURITY
Rise of cyberattacks
The Communications Authority of Kenya (CA) in its latest review shows over 50% of the 87,800 firms that own the .co.ke domain reported password breaches and insider threats, which also affected other companies with domains such as .com.
Overall, cybercrime-related threats in the country rose 199% to 278 million in three months to September with small firms reporting the highest number of incidents.
CA estimates that during the quarter ending December 2020, Kenya’s economy lost in excess of Ksh 35 billion after reporting over 56 million cyber threats which was a hike from the threats detected in the previous quarter.
A Visa Global Risk Investigations report last month showed that cybercriminals are now shifting their targets to physical points of vulnerability as in-person commerce resumes to pre-Covid levels.
According to the report, card-present threats such as physical skimming on ATMs and point-of-sale terminals increased 176 percent during the 12-month period to December 2021.
COMMODITIES
Effect of lifting the ban of GMO
European buyers of Kenya’s horticultural produce raised concern over the country’s lifting of the ban on genetically modified organisms (GMO), forcing exporters to carry out extra certification to confirm that the products have not been enhanced by the technology.
Fresh Produce Consortium of Kenya Chief Executive Officer Okisegere Ojepat stated the queries they have faced from customers are on whether what they are exporting is still GMO-free.
GMO is yet to be fully adopted by the European Union and there have been concerns before from the continent when Kenya wanted to introduce biotechnology flowers to the market.
The European Union still accounts for the largest ratio of Kenyan horticultural exports taking in 45% of the sales majorly comprising cut flowers, French beans, snow peas and Asian vegetables.
EDUCATION
Private Universities threatened to stop admitting Government sponsored students
Private universities threatened to stop admitting government-sponsored students due to underfunding from the Treasury.
Vice-chancellors of the private universities stated that the current funding formula has unfairly cut the amount of money the institutions get for every government-funded student, forcing them to incur extra costs compared to the public universities.
The funding gap for government-sponsored students in private universities was Ksh 24.38 billion in the year ended June 2021 and is expected to widen as new students enrol in September.
Private universities have admitted 47,548 government-sponsored students and received Sh12.146 billion since the State started sending students to the institutions in 2016
The government pays an average of Sh44,000 per year for every State-sponsored student in the private universities compared to the Sh125,000 offered in public universities.
Their withdrawal will derail the State-backed plan introduced in 2016 to address congestion in public institutions of higher learning such as the University of Nairobi.
TAX
Most SMEs have yet to install new ETRs
More than half of small businesses in the country have failed to adopt the new internet-enabled tax registers (ETRs) that relay daily sales to the Kenya Revenue Authority (KRA)
KRA stated that 94% of large businesses making over Sh1.3 billion in revenue annually had acquired the ETRs and integrated with the authority’s system –Tax Invoice Management System (TIMS) ahead of effective date while 82 percent of medium businesses were compliant.
About 240,000 businesses are VAT-registered but only 106,000 entities file taxes while the rest are non-filers or nil-filers.
The new ETRs are expected to increase collection from VAT by at least 30 percent or Sh156.93 billion.
Background
The new ETRs were introduced to send real-time data on traders’ daily sales to KRA and fight tax evasion arising from manual filing and long queues at Time Tower as per regulations announced in 2020.
KRA had extended the deadline for compliance two times in July and in September.
Under the new system, KRA receives sales and invoice data from all registered companies and traders on a daily basis in a fresh push to boost revenue collections and curb tax evasion.
START -UPS
Electric Taxi Nopea Exits Kenyan Market
Electric vehicle taxi company Nopea ride announced plans to exit the Kenyan market.
The company, in a statement issued on Tuesday, said that it had begun the process of closing down its operations in the country after one of its majority shareholders declared insolvency. The company attributed its decision to shut down its operations in the country to the Covid-19 pandemic, which it said had affected its business.
NopeaRide service was first launched in Kenya in August of 2018 under the name NopiaRide by a Finnish company EkoRent Oy founded in 2014. At the time, the company had only started with about three electric vehicles and two chargers.
However, towards the end of 2019, Nopea received new funding and placed orders for additional electric vehicles and chargers, a plan it said was interrupted by the Covid-19 pandemic.
WHAT YOU MUST HAVE MISSED
Kingdom Securities launched a trading app for retail clients
Stockbroker Kingdom Securities Limited introduced a mobile trading application that allows investors to buy and sell shares, with the move being part of efforts to enhance efficiency and customer service. The platform enables investors to monitor the market in real-time and trade from any location, giving them more options for managing their equity portfolios.
Centum Announced a Share Buyback Programme
Investment holding company Centum Plc announced a share buyback program that aims to purchase up to 10% of the issued and paid-up share capital of the Company.
The Buyback Programme is proposed to be undertaken through on-market purchases at the Nairobi Securities Exchange over a period of 18 months from the date of the shareholder resolution approving the Buyback Programme.
Best-performing stocks in the Nairobi Securities Exchange (NSE) in 2022
OCH – Olympia Capital Holdings Limited (32% YTD)
LIMT – Limuru Tea Company Limited (31.3% YTD)
NCBA – NCBA Group Plc (31% YTD)
PORT – East African Portland Cement Co. Ltd (19.8% YTD)
WTK – Williamson Tea Kenya Limited (15.4% YTD)
Kenya’s inflation rate reduces to 9.5%
Kenya’s monthly inflation slowed in the month of November on reduced prices of food and non-alcoholic beverages, transport housing as well as gas. Data from the Kenya National Bureau of Statistics (KNBS) shows that November’s inflation dropped to 9.5% from 9.6% in the previous month.
Reduced inflation came after the cost of food and non-alcoholic beverages fell to 15.4% from 15.8% in the period.