5 Reasons you should join investment groups in Kenya

Investment Groups in Kenya aren’t widely embraced despite the enormous advantages they hold. For instance, young investors, especially the youths are always cash strapped to invest in opportunities. Furthermore, accessing credit from banks due to lack of security is almost impossible. Therefore creating the alternative of forming or joining an investment group.

Basically, for easy understanding, Investment groups or clubs involve the members pooling money together to form capital that is then invested in a certain investment opportunity. The resulting assets are then shared by the members and any returns from their operations or sale. So what are the possible reasons that you should consider starting or joining one?

1. Access to Capital

While real estate investments in Kenya is capital intensive, investment groups or clubs easen access to Capital by pooling the members money together. For example, if a certain group requires a capital injection of let’s say Ksh. 1M to acquire an acre of land, and the group has has 100 members, it would only cost Ksh. 10,000 from each member to raise the capital. Which is way affordable and doable than raising the same cash as one person on short notice.

Interestingly, if you look at it from the economies of scale perspective, then you realize a group with 100 people contributing even as little as Ksh. 2,000 per month would have not less than Ksh. 2.4M at the end of every year available for investment!

That’s the power of numbers right!😉

2. Spreading of risk

Now, back to our first example. For a group of 100 people contributing Ksh. 2,000 monthly towards an investment of let’s say Ksh. 2.4M, each individual’s risk involvement is only the capital contributed. Which totals at Ksh. 24,000 only. Hence the risk is spread as compared to one person shelving the whole risk was something to happen to their Investment.

Besides, the spreading of risk doesn’t stop here. If for some reason the sacco had to take up a loan from a lender of let’s say Ksh. 1M and failed to pay, each members liability to repayment of the loan would only be Ksh. 10,000! Reasonable right?!

3. Access to Multiple Skills

You know what they say about showing me your 4 friends and tell you who you’re? Well, this is where it plays out.

If 100 people of you have joined hands to form one of the many investment groups in Kenya, then from amongst you, there will a varied pool of skills and professions. From within, you’ll meet lawyers, teachers, doctors, entrepreneurs, engineers, ICT gurus, bankers, politicians, property developers among others. And your day to day challenges would be sorted in one way or another from such interactions.

You will also realize that the network grows way faster as time goes by.

4. Faster Economic Empowerment

Fourth is all about wealth creation! From the name itself, you can tell it’s investment! investments! investments!

So when you join such an investment group, of the many benefits you will gain, economic empowerment is at the centre. You will realize that within a short period of time, you will have a share in the many assets that the group will acquire a long the way.

And the progress made as time goes by has a motivating effect in the sense that you will want to invest even more and more. So much so that in around five years, you will have not just settled comfortably but also setup your own Investment portfolio within and beyond the Investment group.

5. Leverage on access to services

Let me ask, have you ever tried to negotiate for lowering of prices of some products that you were interested in alone? How about a loan or even an insurance policy? How was your experience?

Now Imagine 100 members of an Investment group bargaining for a discount on an insurance policy for let’s say their cars, or a reduced interest rate on individual member loans from a bank! How about even negotiating with a wholesaler of products or services for all the 100 members? You get the difference right.

This is why it is very necessary to build leverage through numbers in this case. Because while it affords you access to many opportunities that you wouldnt otherwise access, you also increase your bargaining power as well.

And better enough, it cuts across shopping, hospitality, business as well as education services that you can all get discounts from.

6. Indirect Benefits like Stability

Finally, let’s get abit emotional and see if you actually relate. Picture yourself among 20 or 50 or even 100 friends with whom you’re on the same mission: to invest together. On matters welfare like for instance, if one of the members lost a family member, the other members can easily contribute something even if it’s Ksh. 1,000 on average to condole with him or her. And just like that you’ll have 50K or even 100K to help you sort out afew expenses.

Another instance is coming together to discuss on issues affecting the members such as family relations, linking other members to open employment positions, business opportunities among others.

In Conclusion, investment groups in Kenya pose a great opportunity for most of us who wish to start our investment journeys but somehow don’t know how. The power is definitely in coming together.

FAQs

How much do I need to join an investment group in Kenya?

You can join any investment group with a different registration fees depending o their requirements. However, you can also start your own with friends, family or colleagues.

Successful investment groups in Kenya

Investment groups in Kenya have been successful especially those investing in real estate such as Safaricom Investment Co-operative, KUSCO Housing Co-operative, Uriithi housing Cooperative among others.

What is the purpose of an investment group?

The main purpose of investment groups is to pool members money together for investment and also enable them to share ideas and learn from each other as well.

What are investment groups called?

Investment groups are commonly called Investment Clubs and are groups that enable members to pool resources together for purposes of investment.