Proposal for establishing national investment clubs association

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This is a concept note, with supporting appendices, for the establishment of a national association of investment clubs in South Sudan. The work is proposed to be done by the consultant, Ojijo Pascal, an expert, with experience in financial literacy training for over 6 years, member of bank of Uganda financial literacy advisory group, and founding director and main consultant for setting up of investment clubs association of Uganda. He is also an author of the first book on investment clubs in East Africa, Making Money Together: Ojijo’s Investment Clubs Manual. This proposal lists the methodology, timeline, and

resources needed to set up the association.

allpublicspeakers.com A: Plot 2530, P. O. Box 34416

W: www.allpublicspeakers.com T: +256 41 4696004/31 251 7908

O: Tirupati Mazima Mall, Nsambya, Ggaba-Road

E: [email protected] M: +256776100059/ 701 100059

T: +256 41 4696004/31 251 7908

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Proposal for Establishing National Investment Clubs Association

Submitted By Ojijo Pascal, Consultant, Lawyer, Guest Lecturer, Author Of 35 Books, Public Speaker & Coach.

E: [email protected] M: +256 776 100059.

Contents

Cover Letter

WHAT ARE INVESTMENT CLUBS?

WHY INVESTMENT CLUBS?

THE NEED FOR AN INVESTMENT CLUBS ASSOCIATION

INVESTMENT CLUBS IN EAST AFRICA AND ELSEWHERE!

In Kenya .......................................................................................................................................................6 In Uganda ....................................................................................................................................................6 In United States of America .........................................................................................................................6

THE PROPOSED METHODOLOGY

Identifying A Sponsor-Government Agency .................................................................................................7 Organizing A Dinner For Industry Stakeholders ...........................................................................................7 Identifying Champions .................................................................................................................................7 Conducting A National Mapping Study Of Investment Clubs ......................................................................7 Organizing A National Breakfast .................................................................................................................8 Institutionalization Of The National Association of Investment Clubs ........................................................8 Additional Training Areas ...........................................................................................................................8 Launch Of The National Association of Investment Clubs ...........................................................................8

APPENDICES

Consultants Profile ......................................................................................................................................9 Proposed Work Plan ....................................................................................................................................9 Terms of Reference .................................................................................................................................... 10

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Cover Letter

Wednesday, December 3, 2014

Ojijo Pascal, Lawyer, Author, Public Speaker, Consultant,

T: +256 41 4696004/31 251 7908. Mob: +256 776 100059 E: [email protected] W: www.allpublicspeakers.com

O: Tirupati Mazima Mall, Nsambya, Ggaba-Road A: Plot 2530, P. O. Box 34416

To,

………………………………….

…………………………………..

Dear Sir/Madam,

Re: Consultancy for Establishment of National Association of Investment Clubs

I would like to propose and offer to consult in the establishment of a national association of investment clubs in your country, within a period of 3 months, at a cost of USD. 35,000 (inclusive of transportation, accommodation, food and communication).

Populations the world over are beginning to realise the need to participate in investments. Groups are moving from traditional aspects of savings to borrow, towards the need to save and grow their money through investing. Investment clubs are the vehicles being utilised for this purpose. Investment clubs are groups of people (colleagues, friends, family or clients), coming together to pool money for the purposes of investing.

A national association of investment clubs is an apex body that networks, trains, sets standards for, and lobbies on behalf of investment clubs. Such a body exists in Kenya (Kenya Association of Investment Groups-KAIG- www.kaig.org), and in Uganda (Investment Clubs Association of Uganda-ICAU, www.icau.co.ug). Such bodies help investment clubs to avoid costly mistakes, efficiently allocate their capita, and access premium services and negotiated rates.

My work with investment clubs began five years ago as a volunteer financial literacy trainer, and an author of 7 books on financial literacy, with one on investment clubs. I have since sat in bank of Uganda financial literacy advisory group, as well as helping in the institutionalization of Uganda’s association of investment clubs.

My wide experience both in policy issues, practical management challenges, strategies of engaging partners, and knowledge of financial literacy concepts, strategically position me as a valuable asset in leading the institutionalization and promotion of collective investment schemes generally, and investment clubs specifically, in your country.

I have herein attached my profile; detailed vitae; draft concept note for establishment of the national association; draft work plan; and proposed terms of reference.

Do not hesitate to contact me in case of clarifications, at +256 776 100059, or [email protected].

I look forward to hearing favourably from your good office soon.

Sincerely,

Ojijo Pascal

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WHAT ARE INVESTMENT CLUBS?

An investment club is an organized group of individuals, usually comprised of friends, coworkers, church members,

neighbors or family members, who meet on a regular basis to network, learn and pool their spare cash and invest in

the stock market and/or other investment opportunities. The principle of investment clubs is the idea that together

we can do more1.

WHY INVESTMENT CLUBS?

Investment Club are formed for one main reason, that is, to guarantee financial freedom to the members of the club.

However, investment clubs also provide members with social protection, by such services as group insurance, as

well as educational platform through field learning trips and guest speakers’ sessions.

At a micro level, investment clubs allow members to leverage their small sums and participate in large investments from

the pooled assets. At the macro level, investment clubs provide the nation with liquidity for financing high net

worth projects through involvement of investment clubs in the financial markets, through equity and debt

investments.

Investment Clubs (ICs) as important vehicles for savings mobilization and wealth creation, through boosting long term

investments. The Investment Group system is one sure way a country can grow its economy and create strong

businesses that will be able to gainfully participate in the regional and international investments and trade.

Investment Clubs provide a system of pooling together capital, lowering risks per individual and availing cheap capital

for the SMEs growth. This system can also provide capital investments in strategic ventures for assured and

significant returns. Consequently, Investment Clubs provide opportunities to impact on positive mindset shifts of

members from saving to borrow to saving for long term investments. It is these mindset shifts that will allow

members to identify market, product and investment opportunities for the Clubs’ investment portfolio growth.

1 See Ojijo, Making Money Together: Ojijo’s Investments Clubs Manual (2012); Tony Wainaina, Turning Chama to Conglomerates: Re-inventing your Chama; See also Kenya Association of Investment Groups Handbook (2014)

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THE NEED FOR AN INVESTMENT CLUBS ASSOCIATION

A national association of investment clubs works closely with investment clubs to provide efficient, value added services

in the promotion of formal organization, best practice and profitable investments for investment groups. It empowers investment clubs so they can maximize their investment potential.

Through conducting mapping studies, cross country visits, and engagement of stakeholders, the national association of

investment clubs offers the clubs up to date and reliable information on products for investment clubs in the market, while also lobbying other service providers to provide investment clubs friendly services like specific bank accounts, unique legal regime, and or training and secretarial services modeled for investment clubs. Further, the association can also negotiate premium rates for its members in the areas of legal registration, strategic planning, trainings, and brokerage fees.

Specific roles include: Promote Best Practices: Foster the establishment, growth and good management of investment groups by encouraging

the set-up of formal structures and provide the technical know-how of these structures Education: Provide training and education on the current avenues of investment available to investment groups as well

as creating a platform to educate members on “new” avenues of investment. Networking: Provide a forum for investment group’s members to network, share experiences and inform each other on

best management practices and investment opportunities, while also procuring alliances, affiliations or other synergy with bodies having similar or beneficial objectives within the country and worldwide.

Lobbying: Provide a forum for investment groups to articulate their issues and to provide them with a voice to effect

changes. In addition, it promotes the interests of investment groups by interacting with and lobbying the government and players in the financial and capital markets. Specifically, it also negotiates for preferential terms of service from brokers, banks and other service providers for our members.

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INVESTMENT CLUBS IN EAST AFRICA AND ELSEWHERE!

In Kenya

In the East African region, Kenya has taken the lead in transforming investment clubs from merry goes rounds into listed

companies. Indeed, both at academic and policy level, exemplified by two leading texts in investment clubs by

Kenyans, Chama to Conglomerate: Reinventing Your Investment Group (2013), by Tony Wainaina, himself a member

of an investment club, and owner of investment club advisory services; and Making Money Together: Ojijo’s

Investments Club’s Manual (2010), by Ojijo Pascal, a financial literacy trainer, and founder member of ICAU, which

book is being used by Capital Markets Authority and ACCA Uganda to train investment clubs and financial literacy to

youths in universities and high schools. Kenya has also taken the lead in investment club advisory and consultancy,

with Origins Limited being the first and only investment clubs advisory group2. Further, Kenya has established not

only an national association of investment clubs (Kenya Association of Investment Groups-KAIG3), but has also

established an apex investment fund for investment clubs, Chama of Chamas4, which has since made various high

networth investments.

In Uganda

Uganda has over the last two and half years set up an investment clubs association5, and recently held its first AGM,

which a successful change of leadership. The association already has strategic partnerships with government

agencies, private sector, and over 28 registered members, and upto 151 members.

In United States of America

Globally, investment clubs have been a phenomenon in United States of America since the 1930’s, and have helped

many individuals to pool their money and lift themselves to financial freedom. In the US, the investment clubs are

nationally organized under Better Investing (formerly, National Association of Investment Clubs)6. Elsewhere in

Europe, and other parts of the world, investment clubs have offered their members the strategic benefits of

leverage, and the attendant advantages of risk spreading, participating in high net worth investments, and enjoying

friendship, while also learning about money and investing.

2 Origins IGA available at http://www.originsiga.com/www/resources/news.php accessed on August, 2014 3 Read more at Kenya Association of Investment Groups (K.A.I.G) available at http://www.kaig.org/ accessed on August, 2014 4 Further reading available at http://www.achamalimited.com/ accessed on August, 2014 5 http://www.newvision.co.ug/news/629654-Investment-clubs-get-national-body.html 6 See BetterInvesting , available at http://www.betterinvesting.org/public/default.htm accessed on August, 2014

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THE PROPOSED METHODOLOGY

Identifying A Sponsor-Government Agency

The first step in the formation of a national association of investment clubs is to identify a sponsor from within the

government agencies, preferably the ministry of finance department in charge of competiveness, or at the parastatal

charged with promoting investments: an investment authority.

The letter head, negotiating skills, and credibility of this institution, coupled with the charisma of the leader, will lead to

faster promulgation of the idea of and need to institutionalize investment clubs association. Further, this position

affords the ability to invite and successfully secure attendance to meetings by industry stakeholders, including

representatives of bank CEOs, investment advisors, investment clubs leaders, saccos, and other government agencies in

charge of taxation, and registration of business associations.

It is this authority or department that will call for meetings, facilitate the meetings, and report on the meetings with

various stakeholders, until the steering committee to oversee institutionalization of the national association of

investment clubs is formed.

Organizing A Dinner For Industry Stakeholders

The government authority will then liaise with a cross section of leaders in the investment clubs industry, including

lawyers, bankers, investment clubs advisors, financial literacy trainers, investment club leaders and members, insurance

agents, and financial literacy speakers. This team of up to 30 individuals will meet to discuss the need for an investment

clubs association.

Identifying Champions

From this above meeting with industry players and stakeholders, the government sponsoring authority will identify a

select team of champions, between 5 to 7; individuals who are already involved in the investment clubs arena, either as

investment clubs leaders, founders of saccos, financial literacy trainers of investment clubs, and or private sector players

in the field of investment clubs advisory, and provision of services to investment clubs, including, but not limited to tax

advisory services, registration services, strategic planning services, investment advisory services, and such related areas

of professional expertise.

Conducting A National Mapping Study Of Investment Clubs

The government sponsoring agency, working with the champions, will then conduct a national survey or mapping study

on the status of investment clubs in the country. This will involve researching on the following:

1. The number of investment clubs in the country 2. The challenges and weaknesses faced by investment clubs in the country 3. The strengths and opportunities for growth for investment clubs in the country 4. The capital base and investment vehicles of investment clubs in the country 5. The legal association of investment clubs in the country 6. The number and gender formation investment clubs in the country 7. Representative geographical location of investment groups in the country 8. Outstanding future prospects of investment groups in the country

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Organizing A National Breakfast

The government authority, working with the champions, will then go ahead and invite the public, as well as financial

services industry partners, and specifically, members of the public in investment clubs, saccos, or saving groups, to a

national breakfast, targeting up to 300 participants. It is at this meeting that the report of the survey will be unveiled, it

possible, by the minister in charge of finance or investments. Further, this meeting will also serve to approve the

champions as the steering committee/interim officials, to oversee the institutionalization of the national association of

investment clubs.

Institutionalization Of The National Association of Investment Clubs

The first national breakfast, should be followed by two other national fora for investment clubs, within 6 months, one every quarter, to further spread the word, and publicize the need for a national association of investment clubs. In this time, the champions should visit a neighboring country, either Uganda (Investments Clubs Association of Uganda-ICAU-www.icau.co.ug), or Kenya (Kenya Association of Investment Groups-KAIG-www.kaig.org); to learn from their investment clubs national association, and also finalise the legal registration of the association, as a society, or company limited by guarantee. This visits to foreign countries should also involve sharing with the private sector and their products to investment clubs, specifically, consultancy companies offering secretarial services to investment clubs; banks offering special investment clubs accounts; and investment companies, to name but a few.

Additional Training Areas

The consultant will also train on the following additional areas for value addition and giving more than is expected. The

areas are based on based on the consultant’s best-selling books (in brackets)

1. Retirement Planning (Retire Happy: 21 Questions to Plan My Retirement)

2. Earning Side Income (69 Ways To Earn Extra Money Without Leaving My Day Job)

3. Improved Employee Performance (Stand Out - Build Your Image for Career Success)

4. Making Children Financially Smart (Making My Child Financially Intelligent - Money Lessons by Age Group

(from 3-13 yrs))

5. Entrepreneurship (Sell Something - Think Like An Entrepreneur, Build A Business System)

6. Investment Options (Invest - Ojijo's Guide to Financial Instruments & Alternative Investment Products)

Launch Of The National Association of Investment Clubs

The final part of the consultancy and establishment of the national association will be the launch of the investment clubs association, which should be done by H.E. The President, given the centrality of the national association of investment clubs in meeting both micro, and macro targets of the movement.

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APPENDICES

Consultants Profile

The consultant, Ojijo Pascal, has been volunteering with Competitiveness Secretariat, ministry of finance, Uganda, for the past two and half years, helping in setting up the investment clubs association (www.icau.co.ug), and training investment clubs on start up, dynamics, investment vehicles, and related issues. Before being selected to work with the ministry on this project, he was running his non-profit, InformedInvestors, which was providing free financial literacy to investment clubs, and he had written 9 books on financial literacy, including a book on investment clubs: Making Money Together-Ojijo’s Investment Clubs Manual. He is also a member of the Bank of Uganda (Central Bank) Financial Literacy Advisory Group-FLAG. Further, he volunteers with technoserve Uganda, a US international NGO, as a mentor to women entrepreneurs. His work with Investment Clubs Association of Uganda involved advising, and coordinating on legal registration of the association; drafting the 6-month work plan; drafting a 5 year strategic plan; drafting curriculum for investment clubs (derived from Making Money Together-Ojijo’s Investment Clubs Manual); drafting membership forms; training investment clubs; visiting investment clubs, ministries, and companies to champion formation of investment clubs; and recruiting members

7.

To date, the association has 28 paid members, one year after registration, and two and half years after the idea was mooted by the competitiveness secretariat (Competitiveness and Investment Climate .Strategy Secretariat). It also recently held its AGM, at which meeting three leaders stepped down, to provide for smooth transition of new leaders. In the course of his work in setting up the investment clubs association of Uganda, Ojijo has worked with leaders of investment clubs associations in Kenya, financial literacy speakers, Bank of Uganda Financial Literacy Advisory Group (where I am an advisory member), and others, to name but a few. He has also been sponsored to fly to Nairobi to learn from their experience by the ministry of finance, Uganda government. Further, he has conducted two research projects on investment clubs in Uganda. Ojijo is also a lawyer and guest lecturer in financial services law, ICT law, and law firm management; author of 36 books; public speaker and consultant in financial literacy, collective investment schemes (investment companies, saccos and investment clubs), and financial projections. Ojijo spends his free time as armature pianist and performance poet. Ojijo volunteers as Inua Kijana Fellow, Women in Business Coach, and Rotarian.

Proposed Work Plan

Activity/Timeline Month1 Month 2

Month 3

Presentation and approval of refined concept note, work plan, and terms of reference

Beginning of work

Consultative meetings with sponsor, stakeholders, and champions

Research on Investment Clubs Status (legal entities, numbers, investments, services)

First Stakeholder Meeting (approval of interim officers)

Interim officers training

Visiting a few investment clubs

Meetings with industry players (stock brokers, etc, forging partnerships)

7 http://www.newvision.co.ug/news/629654-Investment-clubs-get-national-body.html

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Drafting of Documents, forms, branding items, website, etc.

Second stakeholder meeting (presentation of draft work plan, institutionalization plan)

Research

Launch of association

First AGM 12-18 Months after Launch

Terms of Reference

Duties of Consultant

The consultant shall provide a work plan for the establishment of the national association of investment clubs.

The consultant shall supervise and oversee the research on the status of investment clubs in the country, produce and present a report.

The consultant shall produce the following documents:

draft 6 month work plan for the national association of investment clubs draft 3-5 year strategic plan for the national association of investment clubs draft governing documents for investment clubs, including, but not limited to the constitution, by laws,

investment policies, draft investment clubs strategic plan and membership forms, draft documents of the national association of investment clubs, including, but not limited to constitution,

membership forms, corporate membership forms, corporate membership agreement, service charter, and investment clubs curriculum

The consultant shall make a presentation of the final work to relevant stakeholders, including, but not limited to client company officers, potential financiers, and other business partners.

Duties of Client

Client shall avail information and documents requested for the preparation of the strategic business plan.

The client shall facilitate all travel, accommodation, and related expenses of the consultant.

Client shall avail a workspace to the consultant for the duration of the work.

Compensation/Payment

As consideration of the work done under above terms of reference, the client shall pay the consultant a total sum of USD 35,000, inclusive of the costs of accommodation, transport, food and communication.

The payment shall be made in part; with 30% before commencing the work; 40% upon completion of the work; and 40% upon approval of final work by client.

Duration

The duration of the consultancy shall be three (3) months.