How women can use the capital markets to grow wealth

Bonds and bills are fixed-income instruments

In Summary

• investing in the capital markets makes sense because of low capital requirements. 

• The amounts required to start investing in the capital markets are much lower than might be required to even start something like a business at times. 

Elizabeth Nkukuu.
Elizabeth Nkukuu.

One of the reasons that we work so hard is to attain financial freedom. This might mean different things to different people but in summary, it is the ability to do what we want to do without cash constraints for example going on holiday, buying a car or house, etc. To achieve financial freedom, one needs to invest so that their cash is working for them. There are different ways to invest i.e. both formal means and informal means like the Merry- go- Rounds. The formal ways of investing include investing in the capital market.

Looking at some indicative numbers 34% of the account's holdings at the Central Depository and Settlement Corporations ( CDSC) held by natural persons are owned by ladies and that 33% of the Sacco holdings are by ladies, then the key question that comes to mind is why is it that ladies still lag behind in terms of investments in more formal markets.

Some of the reasons could be things like

i) Lower Investment Knowledge

ii) Lower disposable income

iii) Higher risk aversion, among others. Despite the above challenges, it is good for us to look at why it might be important for the ladies to relook and see how they can use the available capital markets products to grow their wealth. Some of the products available in the market include others.

  • Shares/ Equities- These are investments in the ownership of companies listed on the stock exchange. One can own as low as 100 shares of any company and they trade daily during weekdays. The main returns ones get is dividends and capital appreciation where one can sale the shares at a higher price than they bought it at;
  • Bonds and Bills: These are fixed-income instruments with tenors varying from as low as three months with some bonds going to as long as 30 years. They are issued by both the government and companies. The income from these fixed income instruments is by way of fixed regular income called coupons and they are paid every six months;
  • Unit Trusts or Collective Investment Schemes: These are pooled investment products that involve collecting funds from many different investors, investing the same in some of the underlying instruments, and generating returns for the members. The unit trust investments vary in risk and return expectations depending on the underlying investments. Some of the key units of trust funds include Money Market funds, Equity funds, Bond funds, and Special funds that invest in specific asset classes.

The main reason why investing in the capital markets makes sense include the following:

  • Low Capital Requirements: The amounts required to start investing in the capital markets are much lower than might be required to even start something like a business at times. For example, investing in unit trusts one needs somethings as low Kshs 1,000.
  • Low Time Investments: While investing in capital markets, the amount of time required is low. In most cases after one has invested, they do not need to keep monitoring the performance of their portfolios. This helps one focus on their job and earn from this in a passive way.
  • Help create some savings discipline: For some of the products like unit trusts one can create standing orders that go directly to the unit trust fund and so does not need to think about the investments in the future.
  • Enhanced returns: Compared to savings, rates capital market products like unit trusts have registered above-average returns, averaging about 10% over the one year compared to the 3% that you get from the savings account.
  • High Liquidity: Most of the product’s trade in the market or if unit trusts have a specific time period within which to access the cash and therefore can easily be relied upon when one has an emergency. The maximum lead time would be seven days for most of them with the exception of treasury bills which have no set market for trading.

Starting the investment journey might not be straight forward but below are the key suggestions on how to start:

  • Invest in acquiring knowledge. This can be done through looking for people offering the training or looking for books speaking about capital markets investments,
  • Tabulating one’s own investment goals so that one can match the investment goals with the right investments,
  • Selecting the partners to walk the investment journey with for example the brokers or the fund managers to use,
  • Opening the right accounts to start the investment process.

The journey ought not to be lonely or self-discovery as there are a number of people carrying out financial advisory and you can always reach out to them. The key is to get someone that has the knowledge and one that you can trust. Equipping yourself with knowledge is also a key part of the process. Understanding where you are going and what will get you there is key.  


Remember It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” — Robert Kiyosaki and “Investing puts money to work. The only reason to save money is to invest it.” — Grant Cardone.

 If you want to start the investment conversation with an expert, email [email protected]. You can also join the WomenWork Network and interact with Elizabeth and other industry experts. .

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