Africa’s banking, investments and asset management industry is currently dominated by private institutional players and by government pension and insurance bodies. These players dominate capital flows in the financial markets. They drive liquidity and they set direction of overall investments and asset management climate. This is not sustainable and does not necessarily fully optimize available resources and strengths of our open society, at least not in the long-run. Enhancing retail investors’ savings, household assets, and individual wealth accumulation remain a vital force which would make Rwanda and Africa’s vision for sustainable wealth and legacy attainable.

Cumulative purchasing power, saving reserves, and liquidity flows amongst retail investors and individual family-offices would substantially surpass corporate players in most aspects, if not all. The issue here remains a lack of financial literacy inclusion for the retail niche as well as a lack of enough custom advisory and wealth management outlets to structure applicable investment vehicles and guide these usually non-sophisticated middle-income families.

Taking asset management as an example, the largest asset managers in the world remain the ones with core products and services focused on and accessible to individual retail clients; mostly with very low to no minimum starting balance. US names like Vanguard, Fidelity Investments, and BlackRock – with trillion of dollars in assets under management – lead their peer institutional asset managers and hedge funds by dozens of folds. In Rwanda, Banque Populaire has long been an ideal case study.

When we look at the success of CHAMAs in Kenya or SACCOs in Rwanda among others, one would not dare to question what individual or collective retail investment and saving schemes have grown to become. Campaigns such as Mutuelle de Santé in Rwanda have shown that our people’s willpower is with no doubt unstoppable; if and when the value for their money is presented with a clear understanding. Therefore, for programs such as Ejo Heza to succeed, Rwanda has to take the solution-based selling approach. Campaigners must present a need and offer the program as a respective solution. Stakeholders will need to showcase what an underfunded retirement would look like. Actuaries, investment advisers, and asset managers have to crunch numbers and show average individuals where their current retirement funding stands and, by doing simulations, where it would be at the time of retirement. Actuarial mortality analysis would show whether or not the individual is going to outlive their reserves, how much they need to contribute to close that gap and what rate of return would need to be earned to get there. Then will come individual estate planning, multigenerational family wealth transfer and legacy programs, and prominence of trusts funds.

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