Coronavirus has affected everyone in the UK, but not everyone has been affected in the same way.



This is starkly apparent when it comes to money. Eight million people are on furlough, receiving 80% of their normal pay from the government’s job retention scheme, while thousands more have been made redundant.



Many self-employed individuals and business owners are likewise under extreme financial pressure because of the lockdown.



But for others, the coronavirus has been a very different experience. Millions have been able to work from home on full pay but with significantly reduced outgoings – no commuting, no expensive coffees or sandwich shop lunches, no dry cleaning bills.



With shopping and entertainment options severely curtailed, general spending has dropping dramatically. According to pollsters YouGov, 1 in 6 people have been able to add to their savings, while 1 in 10 have managed to pay of their debts.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="960" height="480" src="https://www.forbesafrica.com/wp-content/uploads/2020/05/960x0-1.jpg" alt="" class="wp-image-45517" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/05/960x0-1.jpg 960w, https://cms.forbesafrica.com/wp-content/uploads/2020/05/960x0-1-300x150.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/05/960x0-1-600x300.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/05/960x0-1-768x384.jpg 768w" sizes="(max-width: 960px) 100vw, 960px" /><figcaption>44% of respondents feel less secure about their financial situation   YOUGOV</figcaption></figure>



Perhaps not surprisingly, white collar professionals have been better able to improve their finances. Those in manual occupations are more likely to have continued going into work rather than working from home and enjoying the associated cost savings.



Worryingly, YouGov found that 36% of Britons have dipped into their savings to meet their bills during the pandemic, with 44% feeling less financially secure as a result of the crisis.



Additionally, 16% have reported that their debts have gone up, while over a third (35%) have reported that their incomes have decreased.



Government intervention



The financial situation for many people would undoubtedly have been worse had it not been for swift intervention by the government on an unprecedented scale.



The job retention scheme, originally due to run until the end of July, has been extended until the end of October – although from August employers will be expected to contribute towards the cost.



Businesses are also able to access a range of loans underwritten in full or in part by the government, including the&nbsp;<a href="https://www.forbes.com/sites/advisoruk/2020/05/04/how-to-contact-your-bank-for-bounce-back-loan-details/#11cce61b1f87">Bounce Back Loans Scheme</a>&nbsp;and the&nbsp;<a href="https://www.forbes.com/sites/advisoruk/2020/05/19/government-increases-loans-limit-refunds-sick-pay-as-jobs-data-triggers-gloomy-forecasts/#734d76484e4e">Coronavirus Large Business Interruption Loan Scheme</a>, where the maximum loan size was increased from £50 million to £200 million earlier this week.



Additional funding has also been made available to large corporations by the Bank of England.



Other government measures include the&nbsp;<a href="https://www.forbes.com/sites/advisoruk/2020/05/13/income-support-scheme-for-uk-self-employed-goes-live/#25de46e032b1">Self Employment Income Support Scheme</a>. However, at present, this only provides payments to cover the months of March, April and May, and there has been no suggestion that it will be extended in the same way as the job retention scheme.



Mortgage payments holiday



The government is planning to extend its&nbsp;<a href="https://www.forbes.com/sites/advisoruk/2020/05/22/fca-proposes-to-extend-access-to-mortgage-payment-holidays/#299ed5084c47">mortgage payments holiday initiative,</a>&nbsp;whereby banks and building societies are instructed to allow borrowers to miss repayments on the understanding they will make up the accrued capital and interest debt over the rest of their loan.



The scheme was originally due to run until 20 June 2020, but under propoals expected to be rubber-stamped this week, those who have already taken payment holidays will be able to apply for an extension of up to three months, while those who have not yet applied will be able to do so until 31 October 2020.



UK Finance, which represents lenders, says 1.82 million mortgages were subject to a payments holiday as of 20 May – roughly 1 in 6 of all mortgages.



The three-month payment holiday for credit cards and other credit-based products is under active review – we may hear more on that from the Financial Conduct Authority in the coming days.



Impact on motoring



One area of the economy that has seen a huge contraction is motoring, from car sales to fuel consumption.



The number of new car registrations collapsed in April, the first full month of the lockdown, falling 97.3% year on year, from 161,064 in 2019 to 4,321 in 2020.



The restrictions imposed by the lockdown inevitably led to most people driving less or not at all, which had a knock-on effect on sales of petrol. The reduction in supermarket pump prices to below £1 a litre earlier in May was a clear indicator that supply was well ahead of demand.



Research from Lloyds Bank suggests fuel spending in April was down 58%, while day-to-day commuting expenditure was 86% lower.



Online car retailer CarWow reckons more than two fifths of Britons have spent less than £10 on petrol during the last month, with a third purchasing no petrol at all.



Vix Leyton at CarWow, said: “After more than two months in lockdown, the idea of a regular petrol station top-up no doubt seems like a distant memory to the millions of British motorists who’ve not needed fuel &#8211; or perhaps even driven &#8211;&nbsp;for weeks.”



With some of the lockdown restrictions beginning to easy, Leyton suggests now might be a time to fill up: “For those wanting to take advantage of low pump prices, now is arguably the time to do so &#8211; providing you can do so safely &#8211;&nbsp;before lockdown measures are eased even further and long queues begin forming.”



Bike use &#8211; and thefts &#8211; on the up



Another effect of the lockdown has been an rise in the number of people cycling for their permitted daily exercise, but a consequence of this has been an increase in the number of bicycles being stolen.



David Fowkes of insurer Admiral said: “Several cycle retailers have reported that they’ve sold out of many models. We’ve seen a 46% increase in the number of bicycle theft claims over the last seven weeks compared with the same period in 2019. That’s incredible when you consider that overall theft claims have fallen during the lockdown as people have stayed at home, deterring burglars.”



Admiral won plaudits in April when it became the first UK insurer to give&nbsp;<a href="https://www.forbes.com/sites/advisoruk/2020/04/21/uk-car-insurer-admiral-announces-customers-refunds-and-support-for-key-workers/#d4367ac6af35">a cash rebate (£25)</a>&nbsp;to all its car insurance policyholders. Only LV has made a similar pro-active gesture, leading the Financial Conduct Authority to impose a&nbsp;<a href="https://www.forbes.com/sites/advisoruk/2020/05/14/fca-unveils-measures-to-help-insurance-policyholders-hit-by-covid-19/#76d28bd731e3">package of measures</a>&nbsp;that require insurance companies to provide support to customers in financial distress as a result of the pandemic.



Energy bills



With more people working from home and staying at home in line with government stipulations, there has been an increase in domestic energy consumption, with comparison site Compare the Market suggesting annual bills could rise by £400.



However, global demand for energy has reduced sharply, with factories and offices mothballed and travel services limited.



Stephen Murray, energy spokesperson at MoneySuperMarket, says cheaper domestic energy deals are available as a result:&nbsp;“A cocktail of factors have come together to make this is a great time to switch supplier.&nbsp;



“There’s been a major drop in the wholesale element of domestic energy prices of nearly 40%- something partly explained by oversupply in the market due to declining business energy usage as a result of the coronavirus crisis.”



As economies gradually emerge from lockdown and energy demand increases, there is likely to be an impact on prices in the opposite direction.



Tips to keep your finances in shape



Here’s a to-do list for anyone wanting to save money and get their finances in the best possible shape:



<ul class="wp-block-list"><li>Compare energy prices:&nbsp;use a comparison site to see if you can save money by switching. If you’ve never switched or haven’t switched for two or three years, there are likely to be cheap fixed rate deals available</li><li>Talk to your insurer about saving money:&nbsp;the regulator has told car and home insurance companies to help customer whose finances have been harmed by coronavirus, but it’s up to you to contact them to discuss the options, such as reducing the estimated annual mileage on your car insurance and getting a premium refund</li><li>Don’t automatically renew insurance:&nbsp;whenever a car or home insurance policy comes up for renewal, run a quote on a comparison site to see if there’s a better deal out there</li><li>Get the best broadband deal:&nbsp;check you’re on the best deal, especially if you’re working from home or using streaming services more than usual. You need the best combination of speed, capacity, reliability and price. See if your existing service provider can improve its offer</li><li>Talk to your lender:&nbsp;if you have debt, such as a mortgage, personal loan, credit card balance or car finance, and you are struggling to meet your repayments, talk to your lender to see what options are open to you. Don’t be tempted simply to stop making payments as this will have a long-term effect on your financial record.</li></ul>



If you are in financial distress as a result of the pandemic, or it has made your situation worse, contact a debt charity such as <a rel="noreferrer noopener" href="https://www.nationaldebtline.org/" target="_blank">National Debtline</a> or <a rel="noreferrer noopener" href="https://www.stepchange.org/" target="_blank">Stepchange</a> for advice and support.



&#8211;<a href="https://www.forbes.com/sites/kevinpratt/">Kevin Pratt</a>, Forbes Staff, <a href="https://www.forbes.com/sites/advisoruk/">Advisor UK</a>



Contributor Group, <a href="https://www.forbes.com/personal-finance">Personal Finance</a>

Piggy bank, laptop, purse with money, coffee cup on wooden table top.

Finances And Coronavirus: Threats And Opportunities In Lockdown Era

From rock ‘n’ roll roadie to corporate speaker and entrepreneur, Richard Mulholland has run Missing Link, a presentation firm in South Africa, for 21 years. The self-described hobbyist talks finance, investments and expensive tattoos.

How does your company generate profit?
Different entities do it in different ways; Missing Link is a service organization where we basically sell our brain for the pound, whereas TalkDrawer and The Sales Department have a subscription and retainer model respectively. Exploring different business models intrigues me; it’s something I believe all entrepreneurs should embark on. You won’t be killed off by a better business; you’ll be killed off by a better business model.
&nbsp;
What is your investment philosophy? 
I know my weaknesses and this is one. As such I have a set-it-and-forget-it mentality. I find smart people that I like with diversified philosophies and leave them to it. The obvious exception to that is when we invest in starting new businesses.
&nbsp;
What is your most prized investment? 
I hate to be a cliché, but I timed crypto pretty well and have been pretty lucky there. My most prized investment would have to be starting a business though, that has certainly reaped the biggest dividend.
&nbsp;
What advice would you give someone interested in investing? 
In spite of what you’re told, unless you are super rich and have money to blow, investing isn’t a hobby. Find someone smarter than you to do it. Or, if you’re like me, find diverse, smart people and share the investment love.
<a href="http://www.forbesafrica.com/investment/2018/10/02/investing-in-memories-not-material/" target="_blank" rel="noopener">READ MORE: Investing In Memories, Not Material</a>
Legacy or innovation? Which would you invest in and why? 
Again, diversity is key. All that is old is not bad, and all that is new isn’t great.
&nbsp;
Your biggest investment blunder? 
I’ve invested in businesses as a complete outsider, and not given the love and support that they needed at the beginning to get traction. That has never worked… and I never seem to learn.
&nbsp;
What do you spend most of your money on? 
Of late, board games and electric skateboards.
&nbsp;
What is the most expensive item in your wardrobe? 
A motorcycle riding jacket.
&nbsp;
How much were you earning as a rock n’ roll roadie? 
R400 ($27) per week, or R600 ($40) per week while on tour.
&nbsp;
What is the most you spent on a tattoo? 
About R15,000 ($1,000) for a tattoo on my back.
&nbsp;
Would you invest in longevity (prolonging your life) and why/not? 
Only in so far as staying healthy.
 
What is the most interesting thing you have invested in? 
Other people’s businesses. Troop Travel is one I’m quite enamoured with at the moment.

Meandmymoney2

From Rock ‘n’ Roll To Corporate Speaker and Entrepreneur

In these trying financial and debt-ridden times, any money-making scheme sounds better than it should.
The purveyors of Ponzi schemes step in and millions of Africans hand over their savings. In a Ponzi scheme, Peter is robbed to pay Paul. It promises a return on investments, with a claim it is secure; but there is no real investment.
The operator of the scheme uses the money deposited by early investors to pay the first dividend, until investors feel comfortable and decide to invest more. Eventually the scheme falls apart as more cash is taken out and fewer people join.
Yoliswa May (not her real name), of Johannesburg, regrets the day she heard the word Ponzi.
“I should have listened to my inner voice,” she says after R30,000 (around $2,200) went down the drain.
“It’s upsetting to think of how much money I threw away. I lost more than I gained, because I reinvested my returns. I am like a person who walked out of their house with money and got mugged.”
Encouraged by family, she fell into the trap and joined MMM – a worldwide Ponzi scheme run by a convicted Russian fraudster Sergey Mavrodi, who swindled 10,000 Russians out of 110 million roubles ($4.3 million at the time).
“My sister told me of MMM [South Africa], because she had invested with it and received money back. The second time her investment matured, she showed me and said ‘join man, this thing works,’” she says.
<div id="attachment_31374" style="width: 1034px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-31374" class="wp-image-31374 size-large" src="http://www.forbesafrica.com/app/uploads/2017/05/GettyImages-514978632-1024x703.jpg" alt="" width="1024" height="703" srcset="https://cms.forbesafrica.com/wp-content/uploads/2017/05/GettyImages-514978632.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/GettyImages-514978632-300x206.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/GettyImages-514978632-600x412.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/GettyImages-514978632-768x527.jpg 768w" sizes="(max-width: 1024px) 100vw, 1024px" />Mugshots of Charles Ponzi</div>
May, in a heartbeat, cashed in her savings and invested R20,000 ($1,520) in MMM and a month later had about R26,000 ($1,900) in her bank account.
“I was excited after I received the money. I believed that it works. If I didn’t receive the R26,000, I would have never invested again. I chose to invest more money because I was told the more you put in the more you get. So I did just that,” she says.
It promises 30% returns in a new world order with its own currency – the mavros – making it harder for law enforcement to pin it down. It works on a “get help and give help system”.
There is no centralized bank; one member transfers money to another.
May topped up her investment to R30,000 ($2,200). Then things got ugly.
“Two weeks later, our mavros were frozen. They still are. Apparently there was a panic, and a lot of people were withdrawing at the same time so there needed to be a restart,” says May.
“When everything was happening, at the back of my mind I knew that we were warned that things would end this way. The authorities warned us to stay away from MMM because once our money is gone, it would be untraceable, but we didn’t listen. However members remain positive that we will get our money back. It’s a lesson learned. I will never get involved with Ponzi schemes again.”
While May has her head in her hands, Sifiso Sithebe, of Durban, is on his way to the bank with a smile on his face.
“It changed my life. My life has just never been better,” he says.
Sithebe is a breadwinner for his wife and three children but was drowning in debt before he invested R1,000 ($78) in MMM.
“I needed to settle my debt. My family and I were struggling financially. But when I became a member, money was no longer a problem. I could do more than I had planned to with the money I received,” he says.
“I renovated my house and even bought myself a second-hand car. If I never joined, I would have never been able to do any of that; that is why I don’t regret joining.”
Loyiso Heart, a businesswoman from East London, went into MMM with the same hope.
Tired of low returns from the bank, she invested R20,000 ($1,500) in MMM and her confidence in the system grew.  Her next attempt, however, was disastrous.
“My mother and I got together and invested R50,000 ($3,900). Two months later our money went down the drain. The stupid thing that I did was to move to MMM Nigeria after the MMM South Africa saga… I was devastated.”
Heart says, for a long time after both systems collapsed, she had hope it would recover.
“I don’t think they will ever return,” says Heart now.
<img loading="lazy" decoding="async" class="alignleft wp-image-31375 size-large" src="http://www.forbesafrica.com/app/uploads/2017/05/GettyImages-599310874-copy-1024x681.jpg" alt="" width="1024" height="681" srcset="https://cms.forbesafrica.com/wp-content/uploads/2017/05/GettyImages-599310874-copy.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/GettyImages-599310874-copy-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/GettyImages-599310874-copy-600x399.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/GettyImages-599310874-copy-768x511.jpg 768w" sizes="(max-width: 1024px) 100vw, 1024px" />
National Consumer Commission (NCC) spokesman, Trevor Hattingh, says Ponzi schemes are popular because the returns on investment are high, but so is the risk.
“Investing money in a pyramid scheme is a risk because such schemes do not offer any guarantee that you will get your money back. The returns are also not guaranteed, and because the scheme is not registered as a business, or have physical offices, you will not easily be able to track them down if they do not pay you out,” he says.
They are also illegal.
“You run the risk of being prosecuted by law enforcement and other regulatory authorities in South Africa because pyramid schemes are prohibited in terms of Section 43 of the Consumer Protection Act… Consumers should note that they have no legal recourse when a pyramid collapses and they run a risk of losing all their invested money. A pyramid scheme is essentially a get-rich-quick scheme and people join it to make a quick buck. In doing so they obviously do not consider the risks involved,” says Hattingh.
Hatting warns consumers to be cautious with their money.
“Consumers looking to invest money should do due diligence on schemes before deciding to invest in them. Do research about companies and most importantly establish if they are registered to offer financial services. The objective of [Ponzi schemes] is to defraud participants. People are drawn into participation and end up losing their money. There are always more people that lose money than those who gain or benefit from the scheme,” he says.
The problem is so widespread that African governments are discussing working together to get rid of the illegal schemes.
On its website, MMM claims that it is a “community” of people that are simply assisting each other when in need.  It claims it’s a stokvel. A stokvel is an investment society to which members regularly contribute an agreed amount and from which they receive a lump-sum payment.
Worryingly, MMM has all the signs of a Ponzi scheme but its participants are adamant it’s a stokvel.
Miziyonke Mtshali, COO of the National Stokvel Association of South Africa (Nasasa), says this is common.
“We have seen Ponzi schemes that pose as stokvels in order to gain acceptance and support in the communities. We usually learn of new schemes through customers who contact our call center to verify the registration of the schemes they have been approached to join,” says Mtshali.
“In order to gain the trust of the public, these schemes claim that they are members of Nasasa.”
Mtshali warns people to be vigilant as they work with the National Prosecuting Attorney (NPA) to fight such schemes.
Despite these investigations, Mavrodi warns his participants on the MMM South Africa website not to pay attention to ‘negativity’.
“We’re fighting against the world financial system, helping ordinary people, breaking the rules and declaring it expressly – what is to be expected then? It’s only natural they are going to throw all kinds of obstacles our way. Have you seen what happened during Trump’s election campaign when he decided to go against the rules? Have you seen the river of lies and slander the “fair and independent” media poured down on him? It’s about the same thing,” he says.
While Mavrodi claims that all MMM participants have a good story to tell, May is still waiting for her money.
<h3>The Godfather Of The Ponzi Scheme</h3>
Charles Ponzi is the Italian father of Ponzi schemes. He swindled about $7 million, in the early 1900s, from new investors to existing ones. 
Born in Italy in 1882, he moved to Boston, United States, in 1903 and worked as a clerk. He was no stranger to fraud and corruption. He scammed people by promising them a whopping 50% interest in 45 days, or 100% in 90 days. He earned $15 million and became a millionaire in just six months. 
His scam was based on the purchase of International Reply Coupons (IRC), which postal senders provide to receivers to pay for the cost of a reply. 
Justice eventually caught up with Ponzi and he was charged with 86 counts of mail fraud and faced a lifetime in jail. He pleaded guilty to mail fraud and spent 14 years behind bars. 
He died on January 18, 1949, in Rio de Janeiro, Brazil.

GettyImages-87252136-copy

I’m Like A Person Who Walked Out Of My House And Got Mugged

It’s bad news when a commercial bank collapses; it’s frightening when three of them go under within just eight months in a single market.
The back-to-back collapse of mid-tier Chase Bank, Imperial Bank and Dubai Bank sent chills across the Kenyan financial sector – eliciting a scramble for remedial measures, including consolidation and review of capitalization requirements for banks.
Chase Bank’s operations were taken over by the Central Bank of Kenya (CBK) in April after its management failed to declare KES8 million ($80,500) in insider loans, causing panic withdrawals and a run on the bank.
Imperial Bank was taken over in October after fraud was uncovered. Two months earlier, smaller lender, Dubai Bank, was put into receivership.
This state of affairs triggered anxiety on the health of the banking sector in Kenya even though regulators and the National Treasury have gone all-out to downplay the concerns, calling the bank closures “isolated cases”.
“I want to assure my fellow Kenyans that our financial sector remains strong and stable. The recent placing under receivership of three banks was due to specific factors related to these banks and not the whole banking sector,” says Finance Cabinet Secretary Henry Rotich, as he sought to calm nerves over the health of the East African nation’s financial sector.
But even with the assurance, Rotich and his team at the Treasury are not resting. They are planning a raft of strategies, including consolidation, in an attempt to clear weak lenders from the Kenya’s banking sector and help restore confidence through larger and better capitalized outfits.
Rotich plans to re-introduce higher capital levels for banks to guarantee their financial health.
“Last year, I did table in this house specific measures to increase the capitalization of banks in order to ensure we have a strong and stable banking system but our efforts were not successful,” Rotich told the Kenyan Parliament in June when he presented his budget speech.
In 2015, Kenya’s legislators shot down Rotich’s proposal to raise commercial banks’ minimum capital fivefold to KES5 billion ($50 million) within three years, after CBK Governor Patrick Njoroge said such a move would strangle smaller lenders.
Rotich, however, is keen to push through the higher capital requirements this time round and by extension trigger consolidation of weak lenders in an attempt to prevent further financial glitches among the 42 licensed commercial banks.
“I am seeking to introduce the proposals and I am hopeful that members will look at them more favorably in light of the recent developments in our banking industry,” says Rotich.
The impending changes in bank capitalization requirements have already triggered action among small lenders that are keen on complying.
Midsized lenders, presently feeling the pressure to consolidate to capitalize on economies of scale and remain relevant, have already taken to mergers or pacts with private equities to boost the asset position.
I&amp;M Holdings, which has stakes in banks in Kenya, Tanzania, Rwanda and Mauritius, is set to finalize a KES5 billion ($50 million) deal to merge Giro Commercial Bank with its subsidiary I&amp;M Bank.
“In our view, the acquisition will have minimal strategy disruption given similarities of the two banks – both have conservative balance sheets and mainly target middle- to high-income customers as well as SMEs (small and medium enterprises),” the listed lender said in a statement in June.
Small-sized Kenyan lender Oriental Commercial Bank formally rebranded to M-Oriental Bank in June following the acquisition of a 51% stake in the shareholding of Oriental by Bank M Tanzania.
The Kenyan banking industry has also witnessed several other acquisitions recently, including the 75% purchase of Spire Bank (formerly Equatorial Commercial Bank) by Mwalimu Sacco and Nigeria’s Guaranty Trust Bank acquiring Fina Bank.
In 2014, investment group Centum also completed the acquisition of K-Rep Bank (now Sidian Bank) in a deal that raised Centum’s shareholding from 7.54% to 67.54%, having been a minority shareholder in the bank since 2004.
Centum’s acquisition was effected through Bakko Holdco Ltd, a non-operating holding company, to conform to CBK guidelines.
Kenya’s largest bank by asset base, KCB Group, is also looking at medium-sized lenders to buy as part of an expansion plan and is building up capital to boost its acquisition war chest.
“We will look for businesses where there can be synergy, where there can be ability for us to scale up, so medium-sized banks will be areas that we are focusing on today,” KCB CEO Joshua Oigara told Reuters.
In May, KCB Group shareholders gave a nod to the lender’s plan to raise KES10 billion ($100 million) through a rights issue later this year to boost its capital levels. KCB’s total capital stood at KES79 billion ($795 million) at the end of 2015.
KCB Group is expected to acquire a majority stake in Chase Bank after it was recently appointed to manage the mid-tier bank that only re-opened after a brief closure due to liquidity problems following a run by panicked depositors.
The government is also considering merging National Bank of Kenya (NBK), Development Bank of Kenya and Consolidated Bank, which it owns, in a bid to take advantage of having a large lender.
“We are making progress on the issue of consolidation because we now have a consultant who will soon be advising us on how to move. We expect to consolidate the state banks into one or two banks very soon,” Rotich said in April.
The changes in bank capitalization have also seen an inflow of private equity to try and boost the books of Kenyan banks.
In March, Fidelity Commercial Bank announced British private equity and asset management firm Duet Group had acquired a significant stake in the small lender. In the deal, Fidelity Bank will receive KES1.9 billion ($19 million) from the sale and boost its capital position, which was narrowly above mandatory requirements following an increase in adequacy ratios in 2015.
Furthermore, Norway’s investment fund for developing countries, known as Norfund, in partnership with NorFinance, an investment firm created by Norfund and private investors, purchased a 12.22% stake in Kenya’s Equity Group Holdings for an estimated KES26 billion ($261 million) from private equity group Helios Investment Partners.

Hoping For More  To Bank On

It was a shock. Three years ago, Portia Masimula told her family that she was going to quit her safe, well-paid job to start her own IT company. They thought she was mad and her father refused to speak to her.
The 29-year-old entrepreneur was so determined she even put her wedding on hold.
Masimula took every chance that came her way to make her business work. One Tuesday evening, after a stressful day at work, Masimula spotted multi-millionaire Patrice Motsepe, Africa’s 22nd richest man according to FORBES AFRICA, at a restaurant in the V&amp;A Waterfront, Cape Town.
“There he was sitting having dinner. I thought I wasn’t going to let him go past me. I am going to go over there and talk to him. This opportunity comes once in life. They happen randomly. I am thinking ‘what am I going to say to him, let me wait for him to finish dinner’. There I am watching him while he is eating.”
“That’s the thing about being an entrepreneur, you grab every opportunity. As soon as he was finished. The things you do as a businesswoman is crazy. The minute he stood up, I said ‘Mr Motsepe, how are you doing?’ This is who I am.”
The brief meeting ended with a business card and some sage advice from Motsepe.
“He said to me ‘when you looking for something, never mention the word help, say I am looking for partnership’. Those are the wise words he left me with. As a businesswoman, if you don’t talk you are not going to get what you want. You have to take the shininess away from it. In business, you have to take it away. Business has taught me you can’t be shy,” she says.
It is the bold-as-brass move you would expect from the edgy streets of New York. In Masimula’s case, it came from growing up with her grandparents on the dirt roads of KwaMhlanga, a tiny village in Mpumalanga, southwest of South Africa.
“My grandmother is a principal of a school, my grandfather is a school inspector. My mother passed away when I was very young and my father had me when he was still a boy in Grade 11 at school, which is why I was living with my grandparents from my father’s side. He couldn’t afford to look after me.”
Masimula says her father came back into her life once he had matured and educated himself at university.
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“It becomes hard. I was born for this. I was born to do business. I know it becomes difficult when they want you to do things in a traditional way. It’s not an easy journey. My father was actually angry at me at some stage. Asking why I was leaving a solid job and opening a business. I tried to explain to him this was the journey I wanted to take. Initially he wasn’t supportive to it,” she says.
One reason her family was shocked with the news was that Masimula didn’t know anything about the business she was going into.
“I was hanging around with a lot of the tech guys, and I developed interests. If you look at it now, the digital space is where it’s happening. It’s fast in terms of tech. I was so curious. I thought ‘how could I get involved and make this a business’. While I was sitting there, I thought let’s start a company and do this. That was 2013 and we didn’t waste time.
“I always had the entrepreneurial spirit in me. I knew that one day I was going to have my own business, even though I didn’t know what sort of business it would be,” she says.
“I enrolled in some courses at the University of Cape Town. I would practice programming and luckily enough my fiancée, Mhlonipheni, is in IT and is a developer. I used to come home at night and practice and he would show me how to program.”
It led to Masimula leaving her comfortable job in financial marketing to open IT solutions company Kansani Tech.
“As a woman in this industry, it is the toughest thing ever. Most of the time you are sitting in a boardroom and it’s just men. They are sitting there and asking ‘what are you doing here, woman’?
“The ultimate goal is for a four-year contract. We want to get to that level. For now, it’s small projects,” says Masimula, who built a R6,000 ($400) app for a doctor who wants to keep in touch with her patients.
“The doctor wanted to retain her clients. She runs weight-loss programs. The people who come to see her don’t monitor it properly. When you are developing an app, you need all the ingredients, you need to monitor your food and your exercise. Today, [the doctor] can see what [her patients] have done by recording it on their phone. Instead of [the patients] picking up the phone and having to book the doctor, she can access the app,” says Masimula.
And the postponed wedding? When will her fiancée pay the delayed bride-prize?
“Lobola, it will come, but for now, we are all about building the business. The minute we see the business on the level where it doesn’t need us, we’ll pay up,” she says with a smile.
Clearly, marriage can wait, but business can’t.

PortiaMasimula_JC-5-of-7

What Are  You Doing  Here, Woman?’

Time and again, we read of celebrities who have made and lost huge fortunes. Behind the veil of celebrity, are ordinary people that make mistakes with money just like everyone else; however their mistakes can appear to be more pronounced, as they cannot be easily reversed. Here are some important celebrity money lessons for us all.
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<h4>Overspending</h4>
Celebrities are under enormous pressure to keep up appearances and often live a lifestyle far beyond their means. But spending excessively over a period of time without corresponding inflows can have dire consequences. Celebrity is almost synonymous with luxury; it is a lifestyle that is associated with visible success, not financial stability. Building wealth is not about how much you make, but how much you keep.
<h4>Poor investment choices</h4>
Seeking professional advice is always recommended, as advisors have a plethora of information with which to make informed decisions. However, not all financial advisors are honest or appreciate the fiduciary duty that comes with money management. Many celebrities delegate total responsibility to “advisors” who may end up mismanaging their money, defrauding them or making some poor investment choices. It is important to do thorough due diligence before engaging any professional.
If you pay little attention to your investments and do not understand what you are getting into, you become very vulnerable. Even though you might not have the time or expertise to manage your own finances, you ought to have a basic understanding of what you are investing in as well as the implications of doing so.
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<h4>Not paying taxes</h4>
Tax laws can be confusing and are constantly revised. Whether you are the ordinary worker or a celebrity, tax obligations cannot be ignored or they will come back to haunt you. Many celebrities have fallen foul of tax laws as they have not kept abreast of this important aspect of their financial lives. Remember that you are obliged to pay tax and if you fail to do so, the law will eventually catch up with you.
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<h4>Not having a prenuptial agreement</h4>
The pressures of celebrity, in the full glare of the media and the public, can put tremendous strain on relationships. If you bring substantial assets to a partnership, particularly where this might be a second or third marriage, it is worth considering a prenuptial agreement to protect assets before getting married. It may not be romantic, and it might not feel right to keep assets and properties separate, but it can save a couple from drawn out agony during a divorce.
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<h4>Not reviewing an estate plan</h4>
An estate plan should be updated to address any major life event, such as the birth of a child or grandchild, a marriage, or a divorce. If one fails to do this, beneficiaries that you planned to bequeath assets to might end up being left out of a will or trust.
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<h4>Not having adequate insurance</h4>
A serious illness or disability can obliterate one’s finances, especially if you have a career in sports or the entertainment industry. People tend to overlook the financial implications of a serious illness and ignore the need for insurance until a major mishap occurs; it is only then that the impact of inadequate insurance coverage or emergency savings is glaring. No matter how meticulous you are with your finances, failure to purchase adequate insurance can impair your financial future and put you in a desperate situation in an instant.
You may not be a celebrity but there are countless lessons to learn from their lifestyle. Plan for what could be an uncertain future by diversifying earning streams, investing and protecting the large sums of money earned today for tomorrow to avoid the road from riches to rags.
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For more personal finance tips, follow Money Matters With Nimi on Twitter: @MMWITHNIMI and Facebook: MoneyMattersWithNimi

Lessons To Learn From The Rich And Famous

Have you ever been a victim of fraud or identity theft, where some of your personal documents were stolen and the data used fraudulently? Today, with online shopping and social media being a way of life, you cannot afford to be complacent about protecting your financial information. In today’s ‘virtual’ world, we are much more vulnerable than ever and must be more vigilant in safeguarding our finances. Here are some tips to minimize the risk or damage of this happening to you.
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Are your sensitive documents kept securely,
Where are your certificates and other important documents? Are they lying around in unlocked drawers or are they locked away securely in a fireproof safe? Apart from securing the physical documents, scan and secure them electronically.
It is not enough to just casually discard old financial statements; they can become prime target for thieves. Invest in a paper shredder; a personal one for home use is not very expensive and with this you can effectively destroy documents rather than simply tearing them up.
Secure your devices
Are your smartphone, laptop or other devices password protected? If your password or PIN is compromised, this could lead to devastating losses should someone gain access to your financial information. Do not share your passwords or PINs with anyone. If you think you might forget them and absolutely need to write them down, then store them securely and change them periodically using different passwords for different accounts or devices. Set strong passwords; be creative with your choice and avoid easy-to-guess passwords such as birthdays and names of family members.
In addition, secure your devices with a firewall and security software packages that have anti-virus and anti-spam features. If you are technologically challenged, get an IT specialist or a tech savvy friend that you trust to help you download and install this.
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What’s in your wallet or handbag? Sensitive documents should be kept securely in a bank deposit or a home safe, particularly those with your name and address on them. Make a photocopy of your current cards, driver’s license, and any important documents; these copies will come in handy if you need to cancel quickly or need to order replacements. Have your bank emergency numbers handy so that you can make those calls if you need to.
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Beware of scams
Your bank and other legitimate companies will never request for sensitive information such as bank details, passwords and PINs by telephone or email; these are usually fraudsters attempting to defraud you. Contact your bank directly and report such incidents.
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Do you use public computers?
Avoid using public computers for sensitive transactions as your information could be compromised. If you do use a public computer, be sure to clear your history before you log out completely, otherwise other users can intercept your information. Free wireless internet hotspots are often not at all secure. Use secure websites for your online shopping. The address will usually start with ‘https’ and there should be a key or closed padlock in the status bar. Shop only with trusted retailers.
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What are you sharing on social media?
Do you share personal information on social media, such as your address or telephone number?  It seems so natural to put seemingly innocent information about yourself and your family out there but it makes it possible for fraudsters to authenticate your identity. Geo-tagged photos inform people of exactly where you are; this could expose you and your family to crime.
Even if you put all these measures in place, there is no guarantee that your financial information will be completely secure. However, by protecting yourself, you limit access to sensitive information and protect your personal finances from fraud.
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For more personal finance tips, follow Money Matters With Nimi on Twitter: @MMWITHNIMI and Facebook: MoneyMattersWithNimi

IS YOUR INFORMATION SECURE?

With all the excitement and anticipation that comes with holidays it is so easy to overspend. Here are a few tips to manage your holiday finances and still have a lot of fun.
<h4>Plan ahead</h4>
By booking early, there is time to shop around for the best deals on fares, accommodation and tour packages. If your plans aren’t already in place, you will have little flexibility and will have to accept whatever is available. Last minute bookings can cost you much more than if you had booked weeks, if not months, in advance. This can get really expensive particularly for a large family.
Air miles are useful in offsetting some of your ticket or accommodation costs. However, it is a challenge to find air mile tickets during peak periods.
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<h4>Draw up a holiday budget, and stick to it</h4>
You do not have to travel to an expensive and exotic location just because everyone else is doing so. Set an overall spending limit involving your family and try to stick to this. You will need to budget for the various aspects of holiday spending. Avoid borrowing to finance a holiday unless there is some certainty of an impending inflow of funds or other compelling reason to do so.
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Credit cards, debit cards or cash?
If you plan to use your cards while you are away, notify your bank or card company; as an added security precaution, many card providers look out for suspicious activity and your account may be suspended until they have confirmed that it is indeed you using the card.
As far as possible, use your debit card for withdrawals at ATMs during bank opening hours. Always hold some cash just in case your card is lost, stolen or fails to work.
Licensed bureau de changes are usually available at airports; this is very convenient particularly when you arrive, but they tend not to be as competitive as those in town. Also, be cautious when you patronize moneychangers, as there is the risk of being shortchanged or sold counterfeit money.
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<h4>Beware of roaming charges</h4>
The new-generation smart phones provide us with instant access to the internet. We thus unwittingly leave ourselves open to exorbitant international roaming charges. The continuous activity as soon as we switch on our electronic gadgets utilizes data, leading to constant charging and a shocking bill when you return home.
Fortunately, smartphones have a range of options and you can choose which services to switch off. After disabling data services, you can still make and receive calls and send and receive text messages. In addition, you can turn this feature on and off,  so you can still check your emails periodically.
You will have access to Wi-Fi hotspots at internet cafes and your hotel. Use ‘free’ hotspots with extreme caution, particularly for transactions; they may be convenient but are not always secure and you could be compromising your sensitive information. Reduce your vulnerability by using strong passwords and security software.
It makes sense to buy a local SIM card when you arrive at your destination, making calls will be much cheaper than using your usual number.
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<h4>Are you insured?</h4>
While vacations usually go without incident, you don’t want to be caught unawares. What if someone in your family suddenly becomes ill? What if your luggage gets lost or you have to cancel your trip? Travel insurance usually includes coverage for medical bills, lost baggage and cancellations. Read the fine print to ensure that you have the best coverage at affordable rates and make sure you have your medical insurance card.
Above all, remember that a vacation is really about spending quality time with loved ones, resting and having time for yourself. It doesn’t have to be expensive; you can rediscover your own environment by visiting places close to home, revisit your hobbies, pastimes, and sports. With a little careful planning, you can find a balance between having a holiday and still keeping your finances in check.
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For more personal finance tips, follow Money Matters With Nimi on Twitter: @MMWITHNIMI and Facebook: MoneyMattersWithNimi

Managing your holiday finances

Countries in sub-Saharan Africa are set to clock up the fastest pace of growth since the global financial crisis struck five years ago, despite the weak global environment. But it has not prevented the finances in many of their economies from deteriorating. The question is, should we be worried?
Budget deficits in the region have swelled in the past decade, as governments have ratcheted up their spending. According to research from UK-based Capital Economics, the combined shortfall for the region in 2012 amounted to 2.5% of gross dom-estic product (GDP) – a key financial health ratio – compared with just 0.5% in 2000. Ironically, the trend has nothing to do with excessive borrowing. Over the same period, government debt as a share of GDP plunged to 33% from 70% – a respectable level.
However, the improvement in debt ratios has been driven largely by debt relief from Western donors. As these countries grapple with their own fiscal constraints, this is likely to dwindle. At the same time, prices for exported commodities, the mainstay of the region’s economies, are starting to subside after reaching historic peaks in the past decade. This means that governments will have less to spend on financing their own development, and may have to borrow more to do so.
The marked acceleration in spending that has taken place across the region is generally viewed as positive. Most of the money is invested in capital projects, which will ultimately boost growth potential. Sub-Saharan Africa needs an estimated $93 billion a year for infrastructure development. But some governments are pumping increased amounts of money into what is known as current spending. This includes the salaries of civil servants and subsidies on necessities like fuel, electricity and food. These eventually become unaffordable.
The biggest spenders on subsidies in the region are Angola, Ghana, Nigeria, Mozambique and Zambia. Ample oil revenues mean that Angola and Nigeria can cope with the financial burden, but the finances of the other three countries are not as healthy. In Ghana, fuel and electricity subsidies swallow nearly a quarter of official revenues. Power subsidies alone account for 17% of revenue in Mozambique and 20% in Zambia.
Yvette Babb, Standard Bank’s Africa strategist, believes that countries in sub-Saharan Africa are trying to address the burden of fiscal subsidies. She says that there has been a strong improvement in the way that fiscal budgets have been managed. She also says that the debt burdens of countries in the region are generally still “enviable” when compared with the US and Europe.
However, there are significant exceptions. The region’s two main offenders are Ghana, its biggest cocoa producer, and Zambia, its top copper producer. Both countries’ economies are growing at a heady pace of more than 7%, so there is little justification for fiscal slippage.
In what was seen as a bid to garner support ahead of the 2012 elections, Ghana overhauled its government salary structure in 2010. The public wage bill was pushed up to nearly half of overall spending. This had disastrous effects on the country’s financial credentials. Ghana’s budget deficit ballooned to about 12% of GDP in 2012, nearly double its official target, from just 4% in 2011. Its debt had reached 50% of GDP at the end of 2012, up from 41% a year earlier.
Ghana’s government has pledged to narrow its budget deficit to 9% in 2013 and 6% by 2015, but there is widespread skepticism that these targets can be achieved. In what was seen as a step in the right direction, the country scrapped fuel subsidies worth $500 million in May.
Despite partial cuts in fuel and maize subsidies in 2013, Zambia’s budget deficit is also expected to widen, reaching 8.5% of GDP in 2013 from 2.8% in 2012. After a broad-based increase in civil servants’ salaries, the country’s budgeted wage bill will climb to more than half of official revenues in 2014, from 40% previously.
One of the strategies that Ghana, Zambia, and several other sub-Saharan African countries have deployed to deal with their fiscal challenges is tapping international capital markets. In 2013, governments from the region raised more than $5 billion in global sovereign bonds – including several debuts. That compares to issuance of just $1 billion a decade ago.
More bonds are in the pipeline, with Zambia, Kenya, Tanzania and Senegal all likely to enter the market. And there is ample appetite from investors. In 2012, Zambia’s debut $750 million Eurobond was 15 times oversubscribed. Provided the money is allocated wisely, the trend is set to continue.

Tag: Finances

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