Most young people, especially students, always complain of lack of start-up capital when they complete their university studies. This challenge has meant that many youth with great business ideas do not implement them.
However, if youth started saving when still in school, this problem could be reduced drastically. One of the avenues students and youth generally can use to mobilise savings is by buying shares in firms listed on the stock market.
Robert Mathu, the Capital Market Authority (CMA) executive director, said capital market is one of the easiest avenues where one can save for the future. He explained that a student can start with as little as Rwf9,300 for 100 Crystal Telecom shares (the counter was at Rwf93/share on April 4), and a minimum of Rwf100,000 for Treasury bonds. He said at the bourse, one earns a profit without struggling for it.
“In order to secure their future, youth need to venture into smart savings that will guarantee sustainability, which includes venturing into the capital market and buying stock or bonds offered different firms at the bourse,” he said.
“This will help youth develop a strong savings backbone.” He explained that one can invest in stocks or TBs as an individual since the market offers that opportunity, or the youth can form investment groups and pool funds to buy shares or government and corporate bonds. Mathu said, unlike other investments like real estate or starting a small business, investing on the stock market does not require huge sums of money.
“The youth can benefit by raising capital at a lower cost by consistently buying small shares, and eventually accummualte enough savings to invest in other ventures,” he adds.
He said the authority promotes youth savings on the bourse through its annual Capital Market Authority University Challenge competition. Winners get shares in some of the listed firms on the Rwanda Stock Exchange, which they have continued to expand and reinvest in more shares, he added.
This, he said, gave birth to some of the investment clubs in varsities across the country, which are playing a big role in promoting a savings culture among university students.
FaustinKarekezi, a former investment club president at the University of Rwanda College of Education (formerly Kigali Institute of Education), said being part of investment club had been so beneficial to him where he acquired skills and knowledge that have helped him to navigate the future through effective saving and investment.
“Through participation in the investment club I got to understand better the benefits of saving and investing in shares as a student. Before I left university, I had already bought personal shares in Bralirwa, one of the local companies listed on the RSE, as part of savings schemes,” he added in an interview with Business Times on Friday.