BY VICTOR ADAR
Hetal Nathwani doesn’t shy away from disrupting status quo. Looking sharp and energised, the Diaspora coordinator for Cytonn Investments seeks to ease not only investing but also house buying by mainly focusing on offering alternative investment solutions to individual high net worth investors, global and institutional investors as well as Kenyans in the Diaspora who are attracted to the ever growing East Africa region.
Looking at it from a macro level, Ms Nathwani believes that Diaspora market is in fact getting hotter. The contributions that came in last year, according to Ms Nathwani, was about $1.7 billion (Sh172 million) and this is about 48% of the total inflows in forex that came into the country. So, economically, the diaspora plays a big role in shaping up local economy thanks to the highest foreign exchange that they bring that surpasses even tea and horticulture which has been traditionally the leading foreign exchange earners.
“There is a huge opportunity out there,” she says. “Kenyans out there are used to a certain level of service which unfortunately local players are not able to deliver. What they are lacking over there is attractive returns, convenience in transacting, and a trusted partner. Those are the main needs, and if you can actually meet the three then we have a very good opportunity.”
Kenya’s strong economy is most likely spurring Diaspora inflows thanks to a GDP of 5-7%, a time when countries like North America or Europe generally, are growing at a GDP of either negative to 2, and 3%. This trend may help to explain why Ms Nathwani takes the growth in this complex market seriously.
She knows too well how growing wealth when you are outside your home country could throw you into disarray. Citing the tea industry – which is affected by a lot of factors including the climate, weather, the wild market prices… she says that there is nothing big affecting the new market.
The uptake has been good considering that Cytonn’s Diaspora division has been in operation for just 16 months. Although the first three months was just purely marketing and more of brand visibility, in one year, 2016, they sold about Sh530 million of investments, majorly real estate.
“I would say about 73% of our sales is real estate; the rest comes from structured products. And the interesting thing we learnt is, most of our clients are actually repeat clients and referrals and that tells you that once they invest with you, they develop the trust. Then you’ll really see a lot of money coming in,” says Nathwani.
The biggest challenge in this disruptive sector, though, is trust. Because the Diaspora have been burned before; have invested in companies that did not come through so they are really sceptical about investing in Kenyan companies. Breaking through the issue of trust, and convincing them that it is an institution that is willing to walk the investment journey with “them” is now the difficult part.
For Ms Nathwani, the central point is the way they operate as an institution. You see, sending money through friends and family to invest is good but (you know) it becomes tough when things are slowing down. There is no way you will question your brothers and sisters, leave alone your mum or dad, or even your aunty when they fail to give you regular updates. It is always “you” to blame especially when they end up blowing your cash and not delivering what they promised they would deliver. But what makes Cytonn tick?
“Being an institution, we have excellent customer service. When you invest your money you get business confirmation within 24 hours, you get your monthly statements, you can go online anytime and monitor where your investment is. That whole concept creates a lot of credibility and then we are really a 24/7 shop because we have representatives both in Kenya and in the US. So wherever you are in the world you will fit thanks to our online platform,” she says.
It seems Diaspora is a complex market so much that getting creative is the boost as far as marketing to that group is concerned. She was the happiest lady in town when their online platform was launched, which means Kenyans can actually go and invest online.
“You don’t have to call us, you don’t have to come to Kenya. You can just go to the website and do the whole transactions end to end,” she says.
Her highest moment is when a client appreciates what they do. She says: “when you know they didn’t trust what you do then they finally come and tell you that by the way ‘we really love Cytonn Diaspora, you are effective, you are A plus’ that really is a good moment for me. Then it feels good every time we do the road shows and really get to meet clients face to face, those you’ve been talking to online.”
In terms of numbers, Cytonn actually started with zero but is currently boasting of about 150 clients around the globe thanks to the diversified products. But why do they many divisions?
According to Ms Nathwani, the divisions are actually grown by an internal need. For example, it started as Cytonn Investments alone, and then the need to look for projects.that could give the returns promised to investors came up. These projects turned out to be in real estate. “You see things are tough when you promise an investor, say, 25% to 30% returns in real estate and yet you have to rely on a third party to deliver those returns. It puts you in a situation that you are reliant on the developer.”
Thus it made sense for Cytonn to create their own development arm so that they don’t have to rely on someone else to deliver what they had promised. Armed with Cytonn Real Estate and Cytonn Investments, it made sense to have a company that is independent of Cytonn and that can deliver the correct returns and can look into the interest of those in Diaspora, prompting the need for Cytonn Diaspora. Now all these companies have a very high need for technology, and Cytonn Technology was birthed.
“We can control all these divisions. When you look at all these companies they are actually driven by a need. Two and a half years ago we were about 10 staff members, now we are at 200. We started with one office now we have four offices and counting, she says, adding that Cytonn Diaspora LLC for example, was registered in USA, Washington DC, with offices in Maryland, which opened in 2015.
Definitely, USA is not the only Diaspora market but still remains the largest. The thinking behind the focus on the Diaspora was to bring the front office closer to the market. There are over 130,000 Kenyans in the US.
“We have done two road shows in the US. We did one in 2015 where we went to 10 cities, and then we did another in 2016 where we did 12 cities. We’ve been to Dubai twice, we’ve done an event in Finland and South Africa as well and we are planning to go to the UK this year as well as US again,” says Nathwani.