The Mwango Capital Podcast

In celebration of Customer Service Week, we partnered with Kenya Airways on a discussion about growing towards customer excellence. Our guest host, Terryanne Chebet, is joined by Julius Thairu - Chief Commercial & Customer Officer at Kenya Airways of Customer Service Week in this episode recorded on 08.10.2024.

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Show Notes

00:00:00 Introduction

00:05:03 KQ’s Customer Service Week Activities 

00:06:56 Customer Service Strategy

00:13:27 Improving On Customer Touchpoints

00:21:46 Self-Rebooking Platform

00:24:43 Addressing Customer Challenges

00:32:01 Future Initiatives At KQ

00:39:47 Closing Remarks

In this episode recorded on 03.10.2024, we are joined by Dr. Brian Lishenga - Founding Chair of Rupha Kenya and Dr. Trizah Tracey John - Ag. Head of Health Financing at the Ministry of Health to discuss the Social Health Insurance Fund.

We cover the transition from NHIF to SHIF, SHIF benefits, NHIF’s weaknesses that SHIF seeks to address, implementation challenges, funding mechanisms, and the claims process.

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Key Quotes

“We have the four main sources, where we have the government sources, we have the health insurance aspect, and we have external funding commonly what we call the donor funding, as well as what the population pay at the site, at the point of service delivery, that is the out of pocket expenditure. So looking at those four elements, the whole principle of health financing is to try and balance those four by making sure we have more government funding, more health insurance, less out-of-pocket expenditure, and less reliance on donor funding so that we have sustainable financing for the country.”

Dr. Trizah Tracy John

“The other key difference is that SHA actually carries three funds whereas NHIF had just one fund, the insurance fund managing the insurance scheme. Under SHA, the authority, that is the Social Health Authority, seeks to manage three funds. And that is the primary health care fund, the Social Health Insurance Fun (SHIF), and the emergency chronic and critical illness fund.”

Dr. Trizah Tracy John

“The issue of fraud is double-sided in the sense that one, it was conveniently used to push back against a genuine request for payment. Number two, it was an issue that required collaboration by rogue providers and some NHIF staff.”

Dr. Brian Lishenga

“One of the things that is obviously clear and the reason for the vigorous debate is that the money available to pay for the benefits is not enough. Even if we tax at 2.75%, we don't think we will raise enough money to pay for the healthcare that Kenyans want.”

Dr. Brian Lishenga

“As a country, we need a blueprint for health. We can't have the cyclic political changes that we see in the health sector, because on average, it takes about 15 years for you to realize any return on investment in any change that you bring into the sector, and we must quarantine the sector from the political happenings. And a blueprint is the only way that can change this, and we will use how much of acreage, maybe a president, a governor or your MP is able to cover in that blueprint as the indicators for success.”

Dr. Tim Theuri

Show Notes

00:00:00 Introduction

00:02:07 Transition from NHIF to SHIF

00:09:25 Healthcare Provider’s Perspective

00:16:49 Fraud Within NHIF

00:20:40 NHIF’s Weaknesses that SHIF Seeks to Address

00:30:32 Implementation Challenges and Patient Experiences

00:37:58 SHIF Benefits

00:45:09 Funding, Claims, and Informal Sector Contributions

00:50:05 Proxy Means Testing

00:52:17 Balancing Benefits and Financial Realities

01:03:12 Concluding Remarks

In this episode recorded on 19.09.2024, we are joined by Geofrey Mwaura - Head of Refinancing at Kenya Mortgage Refinance Company, Lydia Owuor - Partner at Cliffe Dekker Hofmeyr, Stella Situma - Partner at Cliffe Dekker Hofmeyr, and Beatrice Chege - Head of Mortage at Absa Bank Kenya to discuss common misconceptions about mortgages in Kenya.

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Key Quotes

“A mortgage can typically be obtained through three means, a borrower may be buying an existing house, or you may be buying off plan, or you may be in ownership of an undeveloped piece of land, and then you're borrowing to construct.”

Lydia Owuor

“When you look at the statistics, Kenya's mortgage penetration is less than 2%, in fact, 1.9% as per the last CBK report that was published last month. We’re actually talking about a very big gap in terms of mortgage penetration. Homeownership sits at around 21% in the country compared to other markets where they are up over 70-65% in Eastern Europe where home ownership is quite high. So we have a lot to do.”

Geoffrey Mwaura

“When we started, there was a limitation on income, 150, 000 which moved to 200, 000. But recently, we have removed that income limitation so that we allow more Kenyans to enjoy this program. So as of today, you can access up to 10.5 million with no income restrictions. So if you are earning through employment or you are doing business, you can still access this as long as you are buying a property that is within that 10.5 million for your own occupation.”

GeoffreyMwaura

“What I want to emphasize is that due diligence is key. In circumstances where you're buying, due diligence is key. Due diligence on the registered owner of the property, due diligence on the property itself, and lately the scope of due diligence has expanded. We've seen flooding incidents, and that may require structural due diligence before you acquire such properties. We've seen properties that have been adversely mentioned. We have an ongoing land conversion and migration process, which is a process of tidying up our records. And there are some properties within Nairobi because that's where we still are, which have not been gazetted for conversion. So you need to be proactive, check why your property has not been gazetted for conversion and please deal with those issues. So do not skip due diligence.”

Lydia Owuor

One of the things to look at when you're dealing with such developers is do they have the necessary approvals for the development that they're taking out? And this is where you actually demand to see those documents because you're buying into this and you need to know that you're buying into something that has already been legally recognized by the government. And then also do they have enough money to finish the construction? Where is their source of income? You don't want to be the ones pumping everything and you know with pre-sales the deposits don't come all at the same time. So when people are not paying what happens does the developer stall and just wait for you to pump in the money?”

Beatrice Chege

Show Notes

00:00:00 Introduction

00:02:49 Understanding Mortgages in Kenya

00:04:18 KMRC’s Role in Affordable Housing 

00:06:29 Eligibility Criteria and Legal Aspects for Mortgages 

00:18:54 Debunking Mortgage Myths

00:23:57 KMRC’s Funding and Impact 

00:30:57 Down Payment, Monthly Repayments, and Foreclosure

00:45:08 Income Limits and Mortgage Accessibility

00:48:52 Credit Worthiness and Mortgage Approval Process

00:54:28 Due Diligence, Success Stories, and Market Impact

01:02:02 Mortgage Products and Closing Remarks

In this episode recorded on 24.09.2024, we are joined by Spiro Kenya CEO, Kaushik Burman, and Deputy Country Manager, Raymond Kitunga, to discuss the impact of Electric Vehicles (EVs) on Kenya's transport sector.

We also cover the African EV market landscape, building the EV ecosystem in Kenya, financing solutions to drive EV adoption, and Spiro’s key products and innovations.

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Key Quotes

“For Spiro, our vision is aligned with what we call SDG goals, sustainable development goals, which means by actually developing affordable and clean mobility accessible infrastructure, we will be in a position to provide this to mass customers, mass consumers so that they feel included, they feel and that leads to a massive amount of compounding in terms of GDP growth, in terms of quality of life, in terms of multiple other factors. So for us, that is the higher purpose which drives us and inspires us to come to work.”

Kaushik Burman

“Now we are deploying fast chargers in Kenya. So wherever you want to go and do a quick fast charge in 15 to 20 minutes, you can fill up, and charge up 30% of your battery. And then we are also giving home charging kits to customers. So people who have access to home charging can just go and charge their batteries through the night.”

Kaushik Burman

“We have developed our own maps. So we don't use Google Maps. We use Spiro maps. Increasingly, you will see that maps will have the energy network footprint, and the number of swap stations. Any boda rider, or even for that matter, if you're a normal consumer, you'll be able to actually see where the swap stations are, where the fast chargers are, and you will increasingly see more and more action happening on Spiro maps.”

Kaushik Burman

Show Notes

00:00:00 Introduction

00:02:25 Spiro’s Journey and Vision

00:05:33 African EV Market Landscape

00:08:16 The EV Revolution

00:11:17 Key Products and Innovations

00:14:59 Building the EV Ecosystem in Kenya

00:20:19 EV vs Fuel-Powered Bikes

00:26:15 Financing Solutions

00:29:46 Regulatory Insights and Future Outlook

In this episode recorded on 12.09.2024, we are joined by AAR Insurance’s CEO, Justine Kosgei, and Head of Distribution, James Kamau, as we explore affordable and flexible insurance solutions for families and businesses.

We also cover insurance penetration in the country, their ShwAARi product, implementing cloud Infrastructure and digital transformation to enhance service provision, and their partnerships with various stakeholders to provide effective insurance coverage.

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Key Quotes

“There are quite a number of barriers that make insurance not accessible amongst Kenyans. One of them is affordability. For a fact, insurance is expensive compared to some of the other priorities in the household…The other barrier to insurance would be probably the product designs, maybe they're a bit complicated for the ordinary person to understand. And the other would be probably trust.”

James Kamau

“The ShwAARi proposition was all about bringing that simplicity to medical insurance and the product has very unique features. It is a very innovative product. It has what we call a one-limit. Most, in fact, all health insurance products have an aspect of inpatient-outpatient and then quite a number of sub-limits to address other concerns like dental, optical maternity and what have you, pre-existing conditions. So what ShwAARi does is to create a solution that is one limit. It gives you a lot of empowerment because you are able to decide on the limit that you have bought.”

James Kamau

“As a result of having our systems in the cloud, we're able to have platforms that provide services in a paperless and electronic manner. So we have a core platform that supports us, especially on claims. One area of this is our claims. That means that, for our customers, we have used this to ensure that they can access services digitally. Using mobile, you can view your health insurance benefits. Using the mobile, you can go to the hospital and be identified using biometrics. Your fingerprints can be used to access your insurance card, and then you can be given services. Then using the same platform hospitals can submit their claims digitally because the platform connects the hospital systems to our systems and therefore we do not need human intervention or paperwork to do that.”

Justin Kosgei

“Finally, I'd like to just highlight one more thing, which we tested again in partnership with our M-TIBA providers, where we worked with transport sectors Saccos to have an evacuation product because of the huge number of accidents that we have in the country. I think recently we've had a lot of accidents happening. Things that we noticed is that whenever accidents happen, there's a delay in getting emergency help. Normally there's a lot of lives that can be saved within that time frame.”

Justin Kosgei

Show Notes

00:00:00 Introduction

00:05:16 Insurance Penetration

00:08:20 Technological and Innovative Solutions 

00:14:25 Affordability and Transparency 

00:16:41 Insurance Products for Women and Youth

00:25:06 Microinsurance

00:32:53 Cloud Infrastructure and Digital Transformation

00:34:20 ShwAARi

00:39:18 Restrictive Limits on Dental and Optical

00:45:53 Flexible Solutions for the Underserved Market

00:50:43 Home and Business Insurance Products

In this episode recorded on 17.09.2024, we are joined by Stanbic Bank’s Asset Management Portfolio Manager Jimmy Karanu, and Head of Asset Management - Christian Mwirigi as we explore wealth creation with Stanbic Asset Management. We also discuss their product offerings, fees, investment allocation, asset classes, and risk management.

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Key Quotes

“With as little as a thousand Kenya shilling, you can be able to partake in our money market offering, and with as little as 100 USD, you are able to partake in the U. S. dollar offering. That is quite intentional because from where we sit we want to equally provide accessibility to these solutions because we believe that's part and parcel of promoting financial inclusion.”

“A money market fund is the safest form of what we call unit trusts that you can partake in. It is designed to ensure that the investments that are contained within that pool are as liquid as possible, are as stable as possible to be able to not only give you a competitive return, but also ensure that your funds are actually readily accessible should you need to access the money.”

“When you look at money market funds, they are designed to minimize risk through something that is called diversification. At the end of the day, the structure of the fund is that, it being a pooled investment, you basically have what you call indirect exposure to multiple asset classes.”

Show Notes

00:00:00 Introduction and Career Journey

0:03:58 Overview of Stanbic Asset Management 

00:05:59 Understanding Unit Trusts and Key Players

00:12:23 Product Offerings and Fees

00:17:01 Investment Allocation, Asset Classes, and Risk Management 

00:25:07 The Investment Process, and Value Dates

00:29:38 Investing for the Long Term

00:38:02 Future Plans and Diversification 

00:44:32 Advice for Young Investors

In this episode recorded on 06.09.2024, our guest host, Terryanne Chebet, is joined by Grace Vihenda - Manager, Innovation and Sustainability at KenyaAirways to discuss the airline’s sustainability efforts through The Aviation Challenge.

We also cover the economic and social aspects of sustainability, the cost-benefit analysis of sustainability efforts, and engaging passengers in sustainability.

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Key Quotes

“Sustainability really is a philosophy. I would put it like that. It's a philosophy, a way of working and running a business, it's not necessarily the thing that you do on the side. Now let's do sustainability, no, it's actually part and parcel of what the organization does every day and is ingrained in the actual strategy of the company.”

Grace Vihenda

“There are ways that sustainability can help to reduce costs. So in many words, I'm saying it's not really a conflict. It's about how can we be smart enough and strategic enough to make sure that our sustainability initiatives are contributing to profitability as opposed to taking away from profitability. So that can include just having to think out of the box and be creative. And for me, that's the one thing I totally love about my combined role of innovation and sustainability because, on the one hand, we have this and have to drive this creative thinking, yes, this is what we need to do. How can we do it in a way that is actually bringing profit to the company as opposed to taking our profit from the company?”

Grace Vihenda

“When you change the way you look at things, the things you look at change.”

Wayne Dyer

Show Notes

00:00:00 Introduction

00:04:08 Innovation and Sustainability

00:05:49 Economic and Social Aspects of Sustainability

00:08:23 Environmental Initiatives and Upcycling

00:10:06 Sustainable Aviation Fuel and Local Partnerships

00:12:01 The Aviation Challenge (TAC)

00:20:49 Cost-Benefit Analysis of Sustainability Efforts

00:25:30 Tree Planting, Climate Action, and Sustainable Fuel Initiatives

00:29:18 Engaging Passengers in Sustainability

00:30:38 Sustainability vs Profitability

00:34:37 Closing Remarks

In this episode recorded 15.08.2024, our guest host, Rhina Namsia, is joined by Wilson Wariari - Chief Investments Officer at ArvoCap Asset Managers and Bill Oloo, CFA - Portfolio Manager at Kuza Asset Management on an insightful discussion on understanding unit trusts and their importance as investment tools.

We also explore the risk and return of different unit trust products, the investment decision process, assessing a fund manager’s performance, management fees, and macroeconomic factors affecting unit trusts.

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Key Quotes

“According to the Capital Markets Authority, a unit trust is simply a pool of assets, which have been gathered together based on the contributions of members. And according to the regulations, we have a variety of unit trusts. We have a money market fund. We have an equity fund. We have a fixed-income fund, and at the same time, we have a balanced fund. And if you have to look at the latest statistics around 86% of the funds are domiciled in money market funds and fixed-income funds. And according to the latest statistics we have, at the end of the first quarter of the year, we had around 225 billion shillings in unit trusts.”

“A client wants the highest possible return while taking the most appropriate level of risk, not necessarily the smallest, but the most appropriate level of risk.”

“One should try as much as possible to expose oneself to asset classes whose returns are not necessarily conjoined. By conjoined, they don't necessarily go up together or they don't exactly go down together. So in other words, you need to expose yourself to a basket of security so that at least from a risk perspective, one is effectively covered.”

“One key aspect that would be able to determine whether or not one can be successful from a long-term perspective, just in terms of gathering wealth would be discipline, and the ability to just be goal oriented.

Show Notes

00:00:00 Introduction 

00:05:21 Understanding Unit Trusts

00:09:15 Risk and Return

00:13:03 Momentum Fund

00:16:52 Investment Decision Process

00:20:45 Assessing Fund Managers’ Performance

00:23:28 Diversification and Advantages of Unit Trusts

00:30:09 Active Funds vs Passive funds

00:40:41 Investment Decisions in Active Funds 

00:48:33 Minimum Investment Amount

00:53:55 Management Fees and Costs 

01:00:00 Macroeconomic Factors Affecting Unit Trusts

In this episode recorded on 22.08.2024, we host NCBA Bank CEO and Kenya Bankers Association Chairman, John Gachora, to discuss the bank’s H1 2024 performance.

We cover the current state of the economy, the acquisition of AIG Kenya, regional subsidiaries and expansion into West Africa, the risk-based pricing model, and the impact of Kenya’s credit rating downgrade.

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Show Notes

00:00:00 Introduction and H1 2024 Performance Highlights 

00:02:33 Managing NPLs and the State of the Economy

00:11:24 Regional Subsidiaries and Expansion to West Africa

00:15:52 FX Performance and the Acquisition of AIG Kenya

00:19:32 M&A and Capital Requirements

00:22:49 Risk-Based Pricing Model

00:24:03 Digital Banking Strategy

00:27:49 Dividend Policy

00:29:23 Rising Staff Costs and Strategic Hiring

00:32:41 Mobile and Digital Loan Offerings

00:38:15 Impact of Kenya’s Credit Rating Downgrade

00:40:41 H2 2024 Outlook

In this episode recorded on 30.07.2024, we explore the challenges and expectations for John Mbadi as Kenya's now Treasury CS, focusing on fiscal strategies, cost-cutting, tax policy, public debt management, and the impact of debt restructuring on financial institutions. The discussion also covers how citizens can hold the government accountable and the importance of transparent and efficient fiscal management.

Our host is Ramah Nyang who is joined by Churchill Ogutu - Economist at IC Group, Stephanie Kimani - Economist, and Ruth Kendagor - Head of Research at The Institute of Public Finance.

This episode is brought to you in partnership with The Institute of Public Finance.

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Key Quotes

“Instead of looking at introducing new taxes and increasing tax rates, I would suggest he focuses on just enhancing the tax collection mechanism, as well as broadening the tax base to increase government revenues. Broadening the government tax base, in this case, is based on the use of digital tax systems just to minimize tax evasion as well as optimize the compliance in overall tax collection and remittance.” - Stephanie Kimani, Economist

“Our tax system has inclined quite significantly on consumption taxes, VAT, and excise tax. Excise tax is meant to be a sin tax. Let it be a sin tax and let's stop the creativity of saying maybe if we include financial services here, we'll get some extra coin. It's a sin tax, let it be a sin tax. Do not impose a fine on other components that are not sins, on issues that affect the day-to-day lives of citizens, issues that make people's lives easier, and issues that make business life easier.” - Ruth Kendagor, Head of Research at the Institute of Public Finance

“When there's a need for budget cuts, it's always the development spend that is cut fast or cut more drastically. This provides the government an opportunity to increase the use of PPPs to fund those large infrastructure projects, which would at the very least help the government in its development agenda.” - Stephanie Kimani, Economist

“What has been happening in the space over the last three, four years, actually even longer than that is, we find that measures that are introduced in the 2023 finance bill have now been reverted in the 2024 finance bill. Measures that were introduced in the 2022 finance bill were reverted in the 2023 finance bill. So predictability really affects business planners. Say, for instance, you are investing in a particular industry in the hotel industry or the hospitality industry and the finance bill 2023 had given you a particular benefit in terms of tax exemptions or subsidized rates for you to put in your investment. Now you look for this good money, billions or millions to invest, and just before you finish constructing your hotel, you haven't even finished it for you to recover anything, the law is changed, and the taxes back up. So really it discourages investors and businesses, and one of the responses we've seen is that a number of businesses have cut back because of the unpredictability of the system.” - Ruth Kendagor, Head of Research at the Institute of Public Finance

“Rescheduling has to happen around reforms. As long as we continue having problems with wastage, for as long as we continue having problems with corruption, and leakage, our rescheduling process will happen, but it will happen in a problematic manner. It will affect citizens because of the extra burden, and any additional cost that comes with it, all the additional pressure will be transferred to citizens. It really will not address the root cause that was meant to be addressed because the whole reason why we want to talk about rescheduling is because we had bad decision-making when we were borrowing debt. And so if these reforms are not put in place, the rescheduling will not really translate much. Finally, rescheduling needs to happen within an environment where there are prospects for economic growth, where you know that we're rescheduling this debt at this particular time, using these resources to invest in this particular area so that we spark growth and the revenues that will be generated from the growth sectors, then you'll be able to pay off that debt.” - Ruth Kendagor, Head of Research at the Institute of Public Finance

Show Notes

00:00:00 Introduction

00:01:37 Top things expected of John Mbadi

00:09:24 What alternatives do Kenyan policymakers have?

00:13:17 Opportunities to cut cost

00:23:55 Unpredictability of tax strategy/laws

00:30:49 Tax cuts

00:40:38 Public debt management

00:44:24 Potential impact of debt restructuring

00:52:06 How can citizens hold the government accountable?