Why your 'chama' is a goldmine
A Nakuru Bodaboda chama grows into a multi-million shilling housing co-operative through monthly contributions of Ksh 100.
Good morning,
Are you a member of a ‘chama’?
Like most of us, my knowledge of ‘chamas’ stemmed from observing my mother and her church fellowship group having monthly meetings to contribute some money and give it entirely to one group member. Long story short, that chama was the cause of many great things: the purchase of a plot of land, renovations in the house and it even paid school fees.
Chama’s have great potential. In 2018, Kenya had about 300,000 registered chamas holding slightly above 300 billion shillings. Chama’s are the underestimated road to financial success. However, many chamas fail after a number of years or reach their ‘natural end’ because of a number of reasons. This is sad because chamas have great potential for wealth creation through investments and all that is needed by chamas is a move to the next level.
what is the next level for your chama?
A move from short-term goals to long-term goals
A move from investing in operational assets to investing in financial assets
Having an investment plan
Seeking professional investment advice before investing.
Considering joining an ‘amalgamated chama’ to pool resources
Next week’s issue will discuss how your chama can move from short-term to long-term goals and the structures that are needed for this move.
Interesting fact: Did you know that Cytonn and Centum are all chamas?
Markets
Online forex trader EGM securities granted license to trade on derivatives contracts in Kenya
As from Tuesday last week, EGM securities joined the derivatives market in Kenya as the first broker to offer derivative contracts of the firms at the Nairobi Stock Exchange.
What this means for investors : Investors in the derivatives market will take less than 5 min to trade on stocks. A major improvement when compared to the current two-day processing time .
EGM will initially offers future contracts for: East Africa Breweries Ltd, Safaricom, KCB, ABSA, Equity Bank, British American Tobacco Kenya.
Carrefour’s abuse of buyer power - reason for all the discounts ?
Know how to pronounce Carrefour?
As soon as I walk into any Carrefour store and look at the prices…
Maybe not for long. Last week, Carrefour was penalised by the competition tribunal for unfair supplier discounts and was ordered to remove certain clauses from their supplier contracts that were unfair to its suppliers.
What was Carrefour doing? -
a) The complaint was that Carrefour charged its suppliers non-refundable fees ignorer for them to get access to shelves in Carrefour’s outlets.
b) Carrefour compelled its suppliers to provide more rebates and discounts than reasonably necessary.
c) Carrefour forced some suppliers to post their staff at its outlets which was against the contractual agreements.
Orders by the tribunal - The retailer has been ordered to remove rebates, listing fees and unilateral delisting of the suppliers from all its contracts with suppliers.
KRA temporarily barred from collecting minimum tax
On Monday last week, the High Court temporarily barred KRA from collecting minimum tax pending the determination of whether the implementation of minimum tax was unconstitutional. The case was filed by officials of Isinya Bar Owners association and Kenya Association of manufacturers.
What is minimum tax? - Last year, Parliament introduced minimum tax at the rate of 1% of gross turnover from January 2021. Minimum tax is based on gross turnover and not profit or gains made. This means that persons making losses are still required to pay minimum tax.
What if you already paid the minimum tax? - No worries! KRA explained that you will retain the money on your iTax ledger pending the outcome of the petitions.
KRA has also appealed the decision and made an application to the Court of Appeal for a stay of orders.
Economy
Cooking gas prices to rise by 350 Kenya shillings
As from 1st July this year, the taxman will impose 16% VAT on liquified petroleum gas (LPG). The tax was reinstated by the Finance act 2020 but the taxman delayed its implementation last year due to concerns about the high cost of living.
What this means for Kenyans: The price of cooking gas will rise by ksh 350 on 1st July this year. This comes as an additional struggle for businesses and persons who have made losses as a result of the lockdown measures that are currently in place.
Other ConversationStarters
Superleague falls apart quick - The Superleague only lasted 48 hours! When the six premier league clubs decided to leave the SuperLeague, it was clear that the breakaway attempt had failed.
What is the Superleague? : The Superleague is an elite soccer competition that was designed to rival the UEFA champions league. It would involve elite clubs in Europe competing for the title. The unique bit about this league is that it would favour the biggest European clubs by having them as permanent teams ‘immune from relegation’. The competition would also have an additional five slots for teams that could be relegated.
Twelve of Europe’s wealthiest teams had signed up as permanent league members. However, the league came under immense criticism. Many soccer fans, players, managers and even the UK prime minister Borris Johnson protested against having the Superleague. The main concern was that it goes against the spirit of the sport which is healthy competition between all soccer clubs irrespective of size. Another concern was that the Superleague focused primarily on profit making instead of the community and love for the sport.
Hair by Amazon?
Amazon set up its first hair salon in London. This is no ordinary Salon though because Amazon will use it to test innovations in the beauty industry.
What innovations? - Amazon claims that the salon will have augmented reality hair consultations meaning that customers will be able to experiment different hairstyles, colours and even choose hair products before deciding on which look to go for.
Can you file an insurance claim if you get an accident past curfew hours?
Insurance companies can really go great lengths to avoid compensating you when you are involved in an accident.
Earlier this month, there was a notice by the Association of Kenya Professional Insurance Agents stating that driving past curfew hours without essential services authorisation or valid emergency reasons could render an insurance claim invalid.
However, the Insurance Regulatory Authority released a notice later stating that persons could still claim even if an accident occurred past curfew hours.
Blogpost of the week - 9 things We should never Minimize - The blogpost explains that we now live in times where we strive to experience more life rather than just gaining possessions. This is seen through the practice of yoga, mediation, limiting time spent on the internet, interest in travelling and setting boundaries with commitments.
However, the blogpost highlights nine things in our lives that should never be minimised:
a) Relationships b) Community c) Gratitude d) Empathy e) Generosity f) Education g) Dreams h) Forgiveness i) joy
QUIZ
What’s one thing apart from a nationwide curfew that would make Kenyans go home early from work ?