Norwich Union House is owned by Norwich Union Properties Ltd (NUP). The
group bought the building as its first venture in real estate. FILE
By EVELYN SITUMA
In Summary
- Groups have grown into multi-billion-shilling ventures
At the corner of Kimathi Street in Nairobi,
right opposite the Hilton Hotel stands a nine-storey building. The
skyscraper forms one of the landmarks of the central business district.
To tenants, the Norwich Union House is a place where they get their plate of chips from a fast food joint on the ground floor. Better still, where they browse the internet from the cybercafés on the top floors.
But to members of the Norwich Union Properties Ltd (NUP), the multi-million-shilling structure is a dream borne of group effort –or what Kenyans popularly know as chama.
NUP’s success story goes back to 1996, when 33 visionary individuals came together to form Critical Mass Growth group (CMG). At the time, the outfit was an investment group like any other. They did what every small group does. Met once a week to deliberate on different development ideas and summed up discussions with weekly contributions of Sh10,000.
A year on, members realised that the contributions were sizeable. This called for a decision on what to do with the money that they were banking every week. It is at this time that the group decided to transform the chama into a company. In 1997, it was incorporated just after the group landed an investment opportunity which gave it the name - Norwich Union.
“We had the chance of purchasing Norwich Union House and since one of the areas we wanted to venture in was real estate, we made it our trademark,” says Michael Maina, general manager of NUP.
NUP stayed true to its vision and today, they own
three more properties worth Sh1.2 billion in Nairobi - Libra House on
Mombasa Road, Ratna Apartments in Lavington and Southern Credit House in
the CBD.
NUP has since become a public company which is selling a share at Sh10 with a minimum limit of 1,000 shares. They will be listing at the NSE soon, says Maina.
The original chama - CMG Ltd also runs CMG investment Ltd, an alternative investment company established in 1998. However, members no longer make contributions. Instead, they conduct rights issues. The group membership now stands at 78, but this group remains private and only NUP is open to the public who are allowed to buy shares from the company.
The story of growing investments from group synergy is not limited to CMG. Rather it is an approach used by one in every three Kenyans to generate wealth, according to statistics from the Kenya Association of Investment groups.
Going it alone
According to Josephine Njuguna, marketing and
product development officer at Bank of Africa (BOA), chamas, or
investing as a group, help people realise their goals quicker as opposed
to going it alone.
BOA is among financial institutions with tailor-made products for such groups. The bank pioneered the service three years ago.
“The product was developed when its innovators recognised the need to offer assistance to chamas,” said Ms Njuguna. The support is to help them achieve their investment dreams.
BOA today takes pride in having 4,000 active chama
accounts worth billions of shillings. The bank offers investment
groups value additions which include monthly experts’ advice clinics and
easy credit facilities.
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