Kenya: Young Investors Taking to the Internet for Trading Lessons
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Business Daily (Nairobi)
29 June 2008
Posted to the web 30 June 2008
Beatrice Gachenge
Kenya's first online investment game is now in full operation. Smart Youth Investment is an Internet-based learning portal for students and other young people, which imitates a stock market and all its activities. The aim is to teach students how to invest in the bourse and demystify its workings.
The face behind the concept is Catherine Gitonga, who started the company after ditching a career in teaching and gaining experience in the bourse at Bridges Capital.
"Teaching was not fun," she says. Gitonga had always aspired to pursue a Bachelor of Commerce degree, but was instead admitted to Moi University in Eldoret for a Bachelor of Education degree course.
The entrepreneur, who also dabbles in motivational techniques, opted out of education after experiencing the all too familiar ordeal of 'tarmac king'.
But now she's all smiles about the leap into multimedia investment, which she plans to use to teach young people all over Kenya.
Today, she runs the first Kenyan enterprise to come up with an online educational investment game. It will among other things, teach them how to build an investment portfolio through online interaction.
Why has she targeted the youth? They are energetic, fun loving, aggressive and go getters. But her passion is mainly based on helping them to be self reliant and financially independent.
One of the biggest problems crippling the youth is lack of savings and investment. For this reason, establishing businesses is hardly a consideration for them.
Besides, as a result of going through the 8-4-4 system, most do not think beyond the white collar jobs. Ms Gitonga says young people form the bulk of the population and the economy cannot thrive without their input. For her, owning a company became a reality because she had learnt to be disciplined in saving.
Business model
It took two and a half years to hatch the business idea and as she travelled the journey, she encountered negative comments because it seemed like a briefcase outfit to some.
When she approached a bank for a loan, having envisaged that she would require a capital base of Sh5 million, the bank was only willing to part with Sh15,000.
"This may be one of the reason why the youth give up. Not many are ready to give them credit, in money or otherwise."
Ms Gitonga soldiered on. Most of the people she explained her business idea to said there was no chance of such an innovation taking off in Kenya.
But the business model was rather simple." I want to teach the youth how to save, but not through the conventional classroom means. Having endured 12 years of classes, young people want something practical and entertaining," she said.
"Since most of the youth are technology savvy and fancy spending time online, how about an online competition where there are virtual stocks and banks, where investors compete by outwitting in the bourse?
"In that environment, though virtual, they will make and lose money, but at the end of the day the winner is given real money to actually trade at the Nairobi Stock Exchange," she explained.
Not even betting control officials, who deal with competitions and raffles understood her vision, prolonging her search for a licence to operate. It is only when she explained the idea to the NSE and some stockbrokers, that she got her big break.
The partnership from the two players as well as Bank of Africa has contributed almost half of her starting capital, making her vision a reality.
In mid May, the online game was officially launched, kicking off with more than 3,000 students from all universities in the country participating.
The games run for three months with the registered students divided into groups of four and each team is given a virtual sum of Sh500,000, which they use to make virtual investments and grow their portfolios.
The teams will be assessed based on the size of their investment portfolio, activity at the virtual bourse as well as interaction with their mentors. The winners will get Sh200,000 for trade in the NSE.
Relevant Links
Ms Gitonga hopes to improve the game so that it can accommodate a virtual bond market, one of the segments young investors would like to understand.
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