Recent deplorable scenes at Nairobi’s Uhuru Park where a distraught group of investors, who had put their cash into the troubled Goldenscape Greenhouses Limited, were plotting to get their money back, points to the low financial literacy levels still existing.
Victims include the rural poor as well as the school and even professionals, who all lack financial skills.
The Goldenscape scam, which was brought right to the living rooms of many Kenyans, is the latest reminder of how unscrupulous individuals have taken advantage of low financial literacy levels the glitters of overnight wealth, to lure gullible Kenyans into dubious wealth schemes.
The collapse of Sh. 2.5 billion Ekeza Sacco Society Limited, where a televangelist conned investors to pump money into a non-existent housing scheme is still fresh in the memory of many.
It is still unclear how regulators allowed the owners of Ekeza Sacco swindle the public, right under their noses. The perpetrators of this financial crime are still out walking free. At Ekeza Sacco’s peak, its assets were worth billions with a membership of over 60,000, promising huge returns to gullible members.
Although stiff regulations has stopped more stock brokerage firms from sinking, like they did a few years back, domestic investors remain sceptical to date of the local bourse.
A recent Household Survey conducted by the Central Bank of Kenya (CBK), Kenya National Bureau of Statistics (KNBS) and FSD Kenya has interesting findings.
For instance, the survey results show that a whopping 46.1 per cent of the population with no formal schooling and 41.6 per cent with basic literacy skills, relied on self when making on financial or investment decisions. Few individuals, when schooled or not, seek financial advice from formal financial institutions, groups or chamas, media/ advertorials or family and friends.
This 2019 survey collected information from individuals aged 16 years and above and gives a glimpse of how households or individuals, rural or urban, make financial decisions. The results indicate that more residents in rural areas (42.2 per cent) depend on their own knowledge in decision making on financial matters compared to 35.8 per cent in urban areas.
Most individuals in the rural areas rely on their own knowledge (42.2) cent, while 35.6 per cent rely on family/friends, 9 per cent on media/advertisements, 4.3 per cent through formal financial institutions and lastly 3.8 per cent seek for financial advice from their Groups or chamas.
The troubles brewing at Goldenscape Greenhouse Limited where investors, who were promised high returns, are now unable to get back their investments, all point out to the gullible public with little or no knowledge on financial dealings.