FACTORS INFLUENCING WEALTH CREATION IN INVESTMENT GROUPS IN KENYA: A CASE OF NAIROBI COUNTY

Abstract

The general objective of this study was to establish the factors influencing wealth creation in investment groups in Kenya where the focus was on investment groups in Nairobi County. The specific objectives of the study were to assess the effects of strategic planning and management and execution of investments on wealth creation among investment groups in Kenya. This research problem was studied through the use of a descriptive research design. The target population was investment groups in Nairobi County, working with various micro-financial institutions like Rafiki DTM, KWFT, SMEP, BIMAS and Opportunity International. The study used Probabilistic sampling technique. Eighty (80) investment groups banking with the MFIs’ head offices in Nairobi were randomly selected. This study collected both primary and secondary data. Primary data was gathered using questionnaires. The questionnaire was administered using a drop and pick later method. Quantitative data collected was analyzed by the use of descriptive statistics using SPSS and presented through percentages, means, standard deviations and frequencies. The study concludes that investment groups play a major role in wealth creation. The study deduces that strategic planning affects wealth creation among the investment groups in Kenya. Strategies for wealth creation are developed in context by committed members and partners. As such corporate governance, strategic objectives, situational analysis, strategic choice and mission and vision statements affects wealth creation in the investment groups. Management and execution of investments affects wealth creation among the investment groups. Commitment to wealth creation investments, stakeholder involvement in investment, investment management skills and traits, management compensation and sense of belonging to investment activities affects wealth creation. Shareholder wealth and contributions to investment projects, sources of income, savings facilities and savings opportunities affect wealth creation in the investment groups. The study recommends that there is need to cultivate shared understanding of strategic goals and objectives and to develop a practical results-relevant practice focused on wealth creation as well as making sound financial decisions which are vital especially with the prevalent economic hardships faced in the present world. The investment groups need to select management teams that are competent in employing creative thinking and logical analysis in combination in order to create the future of the investment groups. The emphasis of groups policy should not only be focused on increasing savings but on removing the impediments to growth as most growth promoting policies may even result in a temporary decline in savings rates. For the investment groups to realize their objectives in wealth creation there is need for understanding the investment laws awareness and compliance, regulatory frameworks, licensing of investments and investment protection legislation.