A Proper Family Budget Meets All Financial Needs

To say that every family should have a monthly budget is an understatement. The only way to control your family's finances is with a budget that keeps track of where the money comes from and where it is absolutely spent. A budget, or cash flow plan for those who do not like the B word, is a critical part of any family's secure financial future.

For most families a budget is far down the list of things that are important in the day to day happenings for most families. For most people doing a budget is another task for which they have little time to deal with. Unfortunately this is the reason so many families are having the financial problems that they are dealing with today. A budget can also be a divisive thing if it is used as a way to control the spending habits and place blamed for the financial failures being experienced. For a family budget to work properly it must be used as a tool by all family members that involves financial goals and compromise to reach them.

A budget is actually not that hard to create and keep simply because it is just a list of monthly income and expenses that is either either on a sheet of paper or on a computer equipped with budgeting software. The idea behind any budgeting process is to create a balance between income and expenses so that at the end of the month there is money left over to save, invest, and build wealth.

There is no concrete method for building a family budget because each family's financial needs are different. Some families may be saving for a new car or family vacation, while others are more intent on building savings and college funds. Most families start their budgeting process simply by writing everything down on a piece of paper but as their financial needs grow more complex they may find they need the services of a financial or investment planner.

Another thing to think about and discuss is what are your family's long term financial goals and how do these fit into and affect the monthly budget. It is important to consider not only the goals of individual family members but also the collective goals of the entire family as well. These can include such things as putting away money for a new home, saving for children's college fund, building that retirement nest egg, and probably the most important thing for any family building an emergency savings fund to protect against unforeseen financial emergencies.

The hardest part of finalizing the family budget is making sure you have all the monthly expenses written down. Missing even one or two can seriously affect your budget because at the end of the month you will have less money then originally budgeted for. Be sure to think of those surprise expenses which is particularly important if you have children. It always seems that some unforeseen expense pops up around one of the kid's school activities, or they need new glasses or braces, or something along those lines. Of course if you have an emergency fund in place you can use money from this for such things.

Setting up a proper family budget will not only help you meet your financial goals but will also save money over the long run. Not having money worries will make family life better for all concerned; it just takes a little time and patience.

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The Forgotten Investment, Silver

Most of the talk these days centers on gold and gold investing. Its brethren, silver, appears to take secondary role as an investment metal and is thought of more as in jewelry and flatware than as a money making investment.

However, history shows that silver has been a medium for storage of wealth for thousands of years and revered one civilization to the next. It has been widely used in mintage of coins from the Greeks to the Spanish. In fact, silver coins were in wide circulation until 1965 and silver certificates were also redeemable into the precious metal.

Silver has qualities which also make it a sought after industrial metal. It has the highest electrical conductivity of all metals and its ductile and malleable. It has been used in electronics, mirrors batteries, photography and numerous other ways. It has been this trade that has had the most influence on the price since the late 1960’s.

Silvers evolution has extended to the financial markets. As markets have grown futures and ETF’s have had a larger impact. This change in this markets have allowed speculators to participate in silvers price movements. Lately there have been widely circulated news stories concerning the price manipulation of the price of silver. This only goes to show the importance of the metal and that in a free market the price would be much higher than it actually is.

Silver has been on a bull run since 2003 due to the fact that there has been growing demand by both investor and manufacturing alike. At the same time supplies and new finds are declining and restricted. Demand SLV the ETF for Silver has been increasing thereby outpacing supplies of available shares, forcing the custodian to issue new shares and in turn buy more physical silver.

The current economic uncertainty has also played a role in the demand for silver as more investors have purchased it for wealth protection and capital appreciation. This has increased the demand and its price. This trend will most likely continue as the economy faces increasing and renewed challenges.

Scrap silver has become valuable again which speaks as to the current market situation. As silver regains acceptance as an investment vehicle for wealth protection, as it had previously. Demand will continue to grow and compete with industrial sector for the metal. The outcome seems fairly obvious since the metal supply is in limited supply.

It is obvious that silver along with gold should be a precious metal that is included in one’s portfolio that seeks wealth protection and capital appreciation. Both technical and fundamental factors indicate that it is and opportune time to invest in gold and silver.

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Bad Credit Business Loan

Based on bank lending practices, one might be misled to believe that people with a bad credit history are not capable of running successful businesses, illegally to repay business loans, and overall, risky borrowers. But the truth of the matter is; having bad credit does not make a person incapable of running a profitable business.

There are many reasons why a person may have a low credit score that may have no relation to their money management skills. These include having obscene amounts of student loans to repay after graduating before getting a job that can support those payments, and getting used in the lure of credit cards as a young adult and having to pay for it later. But in the end, these mistakes can serve as a learning experience, teaching a person to make wiser financial decisions in the future and making them better equipped to handle financial problems that are presented within their business.

The question remains: Is there hope for business owners who have poor personal credit histories? Is there a way to get a bad credit business loan?

The answer is yes. Through a business cash advance, a business owner can get a loan for his / her business even if he / she has bad credit. This is due business cash advance lenders take the strain of repayment off of the borrower, making the business responsible for repaying a loan.

How does this work? A business cash advance is a purchase of a business' future credit card sales. Business cash advance companies provide an up-front cash payment in exchange for a small percentage of the credit card sales that a business makes until the loan is completely paid off. Therefore, having bad credit is not a disqualifying factor when it comes to receiving a business cash advance.

The repayment of a business cash advance also has no affect on a borrower's credit score. So the borrower does not have to worry about worsening his / her credit score when receiving a business cash advance.

Many Americans do not have the 700 point credit score that is normally required to receive a business loan, but that does not mean that their dreams of running a successful business should be shattered. Fortunately, the availability of business cash advances gives business owners with bad credit another option, making it possible for them to finance the development of their businesses.

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4 Things Contractors Should Know About Contractors Insurance

Any company involved in construction work, building maintenance or installation and repair services is in need of contractors insurance. Contractors will be ill-advised to forego contractor insurance in a climate of high crime statistics, unpredictable weather conditions, negligent workers, faulty equipment, defective substances and a million and one other thing that can go wrong in the contracting business.

There is also an ever-growing propensity to be held responsible and accountable for damages caused to third parties. Think about it this way: Insurance premiums cost a mere fraction of stolen materials, damaged projects or compensating agents or third parties for losses incurred through the negligence of workers or the forces of nature beyond anyone's control. By having the conviction and foresight to take out builders' insurance, contracting businesses are safeguarding themselves against possible losses and lawsuits that could end up by severely crippling the company financially or, in the worst case scenario, even bankrupting it. A contractor's policy actually costs very little in terms of premiums and is worth its weight in gold.

The basics of builder's insurance

1. Builders' Risk Coverage (also known as construction coverage)

Builders' risk insurance indemnifies the contractor for losses or damages to a building while the building is under construction. Insurance usually covers the building for a specific time period and applications only while the building is under construction. This type of insurance typically covers fire damage and vandalism. The policy may also include materials in transit to the building site as well as materials and equipment stored on site. Tools, equipment, vehicles, materials and any other assets used on site may also be covered. For the amount of protection it affords (and the peace of mind that goes with it) builder's risk insurance is reliably inexpensively (as against general liability insurance).

2. Insuring Materials on site and in transit

Given the cost of modern building materials, it is common practice for constructors to insure their materials either on site or while in transit. However, the onus is on builders to make sure that all reasonable precautions are in place to protect materials from theft or storm damage as much as possible. This coverage can also include materials stolen in transit due to the vehicle being hijacked while en route to the building site.

3. The most common insurance claims made by contractors

The most frequent claims made by contractors entail materials theft, damaged materials while in transit, storm damage, or surrounding properties being damaged while construction is in progress.

4. Most expensive Claims

The most costly claims most commonly filed by contractor are usually damages caused by third parties and their properties due to the contractor's "negligence" for example, materials being blown off structures in storms or high winds and landing on nearby cars or buildings. Also damage caused to existing underground pipes or cables. Other high claims are damages caused by fire, rainwater damage to structures, lightning damage or severe storm damage. All these liabilities can be covered by an All Risks contractor's policy.

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Is It Possible To Learn How To Earn Money Without Investment?

Learning how to earn money without investment in the online world is a tough thing to do. I know, I've been at it for 3 years and real help and advice is hard to come by. I only really began to find any real success over the last 6-8 months and guess what; it does take a little investment. But beware! The majority of sites that you will visit that claim to help you do these are usually trying to sell you something or get you on their mailing list so they can sell to you at a later date.

There is nothing wrong with this to my mind however, as long as they are pointing you towards products that will actually help you. All too often however they will sell you a product that is sub standard or only really benefits them in some way, usually financially.

I remember about 2 years ago I bought a 'turnkey' website, they claimed that I would get a blog, they would provide all the content and help me to sell thousands of dollars worth of ClickBank products. I excitedly logged into my new WordPress site that they had created for me, only to find that I could not change a bloody thing to the way I wanted it. They had links back to their main site on every page to help their rankings and the support was pretty much useless.

On top of this, I had no clue how to rank a site in Google below on page optimization and maybe doing some blog commentary. As you may have guessed, they did not tell you how to rank well either, even though they obviously knew how to rank well themselves.

I asked for my money back of course, and got most of it. (Apart from about $ 30 that I was stupid enough to part with on a useless up sell from one of their JV partners) A small loss financially but but I look at it as a lesson that I paid for. I'm just happy that I knew enough about WordPress at that time to see I was getting swindled. There are probably hundreds of who were not lucky enough to be armed with that info however and probably spent months trying to work out why they were not selling anything.

The point is this: Many will claim to be able to teach you how to earn money without investment, just to get your email address from you so that they can keep recommending products which you have to buy.

Your best bet is to find a source of honest information where you are not sold at every 5 minutes by an email auto responder.

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Obtaining A First Mortgage For Investment Property

As the name implies, a first mortgage for investment property is simply the first loan that is issued for the property. When you purchase a piece of real estate, the loan that you receive as financing is also known as a first mortgage.

Before you apply for a first mortgage for investment property, it’s a good idea to obtain a copy of your credit report and confirm the accuracy of the information listed therein. Every 12 months, you are entitled to receive a free copy of your credit file from each of the three credit reporting agencies, including Equifax, Experian and TransUnion. The best way to choose a lender for your first mortgage for investment property is to shop around. Compare interest rates, required down payments and other loan terms in order to find the best fit.

When you speak to a lender regarding a first mortgage, they will explain the required down payment, invite you to fill out a loan application, access your credit file and possibly even provide you with a loan decision within hours. In most cases, a lender will require a down payment ranging from 20-35% for investment properties. Depending on your credit history, you may be asked to pay a slightly higher down payment than average. Because the purchase will not be used as a primary residence, the loan term will likely be shorter than a traditional mortgage.

When it comes to a first mortgage, every lender will require that a title search be performed on the property prior to approving a loan. A title search can be performed by a licensed attorney specializing in real estate and is beneficial for making sure that there are no judgments, liens or back taxes on the property. In addition, a title search will confirm the identity of the property owner and will ensure that the seller has the full right to deed the property to a new owner.

While shopping for a lender, most investment property buyers will apply with more than one lending institution. Although it is widely known that multiple credit inquiries in a short period of time may lower your credit score, applying for a mortgage is slightly different if the inquiries are made close together. The reason is because lenders expect that you will apply at multiple locations and may, therefore, not let recent inquiries for a mortgage loan deter them from approving your application for a first mortgage for investment property.

A first mortgage for investment property will be more likely to be approved if the hopeful buyer can provide an appraisal confirming the market value of the property. A loan is even likelier to be approved if the property is being sold for below market value, which will result in instant equity. These factors, combined with an appreciating market and a large down payment will increase your chances of being granted a first mortgage for investment property.

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Home Loans in the UK

Owning a home is the most important dream of any person. It is one of the basic necessities of life as stated by Maslow in his 'Theory of Hierarchy of Needs'. People generally desire to have a home which not only gives them shelter, but also should be the expression of their artistic tastes, and an object of pride. Owning a home is a matter of spending of life's savings. For some- related to the high e-learning group, it is not a problem; but for others arranging financing for their dream home is a very critical decision, they ever take in their life. To enable people to realize there dream, financial institutions and banks offer home loans to people.

Home loans play a very important role in the lives of UK nationals. Every year there are borrowings worth billions of pounds by the UK nationals for home loans. Now days, home loans have become a necessary part of life as it is not essential that one has the necessary amount of money to finance his immediate requirement for purchasing home. One can avail home loans, after signing a document with a financial institution on a specified amount of money to go with the purchase with that borrowed money. Lenders and financial institutions keep the house or any other residential property as collateral. In the UK, home loans are offered by innumerable financial institutions at various APR. The amount of loan approved usually depends on the income and assets of the borrower and his capacity to pay back the loan.

In the UK, home loans offered are of two types:

Fixed rate home loan

Variable rate home loan

Fixed rate home loans are offered to borrowers at a prefixed rate of interest for a specified time period. In case of upward fluctuations in interest rates in the market, customers enjoy the benefit of not paying any extra sum money on the increased rate of interest. Variable rate home loans, on the other hand are left to the mercy of lenders and government regulations. In case of upward trend, the borrowers have to tighten their budget.

With the ever increasing competition in the market, more and more financial institutions are offering home loans at lower APR along with customer oriented services. All companies claim to be the leading loan and other financial services provider with the best service. In order to tap the growing market companies and lending institutions are coming up with more innovative products to cater to the requirements of all the customers. With the advent of internet, the services offered have become more fast and efficient. Now one can compare the best rate offered in the market at the click of the mouse.

The complications in home owner loans fall when borrower defaults in the payment of the monthly installment. In many cases, it has been seen that lenders start charging more interest rate than the standard rate. Wise borrowers, in such situation, switch over to a new lender for better rate of interest and fee waivers. This is termed as remortgage. Remortgage is a very prudent way of avoiding heavy interest rate. There are innumerable agencies which suggest better remortgage options to the borrowers.

Moreover, with gradual shift from the sellers 'market to the buyers' market, the ultimate beneficiary is the customer. Companies even offer value added services to the borrowers to evolve brand loyalty. Companies are even leveraging strength from modern management practices and corporate governance. In the long run, company which offers the best financial solution with the right set of marketing mix will win the race.

For Detail email with the subject "Inquiry".

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24 Hours in Your Wallet

Every writer faces time restrictions. The trick is to find enough time in the day to spend writing. There are several things I do to find more time to write. Negotiate every one of these ideas to maximize your time of opportunity.

Review your ideas that are laid out in front of you. I use note cards and stick notes on my desk to keep ideas around me. This kick starts the thinking process. I also put a current project I’m working on as a desktop background on my computer as a constant reminder to work on that particular task. Every time I am on the computer, there’s a picture of a document that needs worked on starring me in the face.

Push through the fog even if you have a headache or are feeling bad. Be your own nagging boss that says, “Get to work.” Think of a reward that you’ll give yourself when the work is done and put a picture of it where you see it every day. The reward has to be worth it, not just go out to dinner or something lame like that. I enjoy playing pool and set a goal to not play until I finished a project. Stick to it. That pushes me to finish what I started faster. Delayed gratification is a great tool to use. Use every great tool available.

Be as organized as possible. I know folks that can play office all day and not accomplish anything of real value. Focus on the work as a writer, but keep a clean environment.

Use the best software for the project your working on. I use New Novelist software for book type writing and Movie Magic for screenwriting. Download a free trial of Movie Magic and see if it’s right for you. Use the best software you can to maximize your effectiveness of time management and organization.

Eliminate the unnecessary clutter. Work is work, it doesn’t matter what kind it is, whether it’s dishes, digging a hole, or writing. A proper mindset on the value of work is vital. Sweat Equity is the best tool in the world.

Set goals that are difficult but possible. Write three articles a day, three chapters a day, or three scenes a day. Make time your friend and not a thief.

Role-playing allows me to step into someone else’s shoes and get work done that I might not of accomplished otherwise. Think stat, like you hear a doctor say. I’ve got to operate on this chapter, stat or I’ve got to dig up the research and uncover the true like a good detective. This exercise helps me more than you could possibly understand. An exercise like this can make an ordinary writing assignment seem extraordinary, removing the boring out of work. If you’re having fun, then you’ll get more done.

Steal every minute you can from the day. Take your laptop with you to work and pull it out on lunch break if you work a regular job too. I take my laptop fishing with me. When it’s slow and the fish are not biting, I can kick back and type away, glancing at the pole once in a while. The thrill of fishing is the catch, not the wait. Work while you wait. That may sound extreme, but don’t knock it until you try it.

Gather all the best tools and use those to fight against the time steelers.

Copyright© 2007 – AJ Dowell

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Trademark Application: Online Tools to Protect Your Investment

Many businesses understand the benefits of trademarks for their products and services, in protecting them from the time and monetary investment in developing those products and services. However, many organisations and businesses are unaware of the need to register these trademarks to comprehensively protect their brand and business offerings.

Without the security of a registered trademark, a business risks losing the investment, or minimising the effect of, developmental and marketing efforts that it engages in. Competitors in the same or similar industries could potentially own a trademark with comparative qualities and identity in order to market products and services that replicate the business model. This could not only affect the revenue generating capability of the business by increasing the level of competition in the marketplace, but could lead to a damage of the image that has been created; resulting in a lower perception of quality by current and potential customers. Given the importance of securing your investment made in the marketplace, as well as securing the business future, legally registering the interest through the trademark application process is essential.

Applying for a trademark application, and upon finalisation, provides numerous benefits to the business, including that they are able to strongly differentiate their identity and products in the marketplace from their competitors. Furthermore, the trademark can act as a marketing instrument which empowers a company to control the image and perception presented to the market. An important commercial asset, applying for a trademark application can provide a level of quality to consumers, guaranteeing potential buyers of the quality of the products and services being sold.

The brand and logo of the company is the physical representation of the quality of the business. Successful logos and brands evoke instant feelings of trust, credibility and a desire by the consumers to purchase from the brand in question. This is why it is imperative that a trademark application be processed for the company’s design work, images, colour, fonts and other components that make up the logo and brand.

Since the inception of the internet, people have been turning to the web to source important information; and with the recent trends in websites providing online assistance and purchasing, a majority of consumers are turning to the internet to source information and purchase online. Trademark applications are no exception, with industry leading business protection companies developing software and wizards which guide the user through the trademark application process; alerting the user to important issues and prompting where other additional information may be required.

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Building a Kingdom – Case Study of Kingdom Financial Holdings Limited

This article presents a case study of sustained entrepreneurial growth of Kingdom Financial Holdings. It is one of the entrepreneurial banks which survived the financial crisis that started in Zimbabwe in 2003. The bank was established in 1994 by four entrepreneurial young bankers. It has grown substantially over the years. The case examines the origins, growth and expansion of the bank. It concludes by summarizing lessons or principles that can be derived from this case that maybe applicable to entrepreneurs.

Profile of an Entrepreneur: Nigel Chanakira

Nigel Chanakira was raised in the Highfield suburb of Harare in an entrepreneurial family. His father and uncle operated a public transport company Modern Express and later diversified into retail shops. Nigel’s father later exited the family business. He bought out one of the shops and expanded it. During school holidays young Nigel, as the first born, would work in the shops. His parents, particularly his mother, insisted that he acquire an education first.

On completion of high school, Nigel failed to enter dental or medical school, which were his first passions. In fact his grades could only qualify him for the Bachelor of Arts degree programme at the University of Zimbabwe. However, he “sweet-talked his way into a transfer” to the Bachelor in Economics degree programme. Academically he worked hard, exploiting his strong competitive character that was developed during his sporting days. Nigel rigorously applied himself to his academic pursuits and passed his studies with excellent grades, which opened the door to employment as an economist with the Reserve Bank of Zimbabwe (RBZ).

During his stint with the Reserve Bank, his economic mindset indicated to him that wealth creation was happening in the banking sector therefore he determined to understand banking and financial markets. While employed at RBZ, he read for a Master’s degree in Financial Economics and Financial Markets as preparation for his debut into banking. At the Reserve Bank under Dr Moyana, he was part of the research team that put together the policy framework for the liberalization of the financial services within the Economic Structural Adjustment Programme. Being at the right place at the right time, he became aware of the opportunities which were opening up. Nigel exploited his position to identify the most profitable banking institution to work for as preparation for his future. He headed to Bard Discount House and worked for five years under Charles Gurney.

A short while later the two black executives at Bard, Nick Vingirayi and Gibson Muringai, left to form Intermarket Discount House. Their departure inspired the young Nigel. If these two could establish a banking institution of their own so could he, given time. The departure also created an opportunity for him to rise to fill the vacancy. This gave the aspiring banker critical managerial experience. Subsequently he became a director for Bard Investment Services where he gained critical experience in portfolio management, client relationships and dealing within the dealing department. While there he met Franky Kufa, a young dealer who was making waves, who would later become a key co-entrepreneur with him.

Despite his professional business engagement his father enrolled Nigel in the Barclays Bank “Start Your Own Business” Programme. However what really made an impact on the young entrepreneur was the Empretec Entrepreneur Training programme (May 1994), to which he was introduced by Mrs Tsitsi Masiyiwa. The course demonstrated that he had the requisite entrepreneurial competences.

Nigel talked Charles Gurney into an attempted management buy-out of Bard from Anglo -American. This failed and the increasingly frustrated aspiring entrepreneur considered employment opportunities with Nick Vingirai’s Intermarket and Never Mhlanga’s National Discount House which was on the verge of being formed – hoping to join as a shareholder since he was acquainted with the promoters. He was denied this opportunity.

Being frustrated at Bard and having been denied entry into the club by pioneers, he resigned in October 1994 with the encouragement of Mrs Masiyiwa to pursue his entrepreneurial dream.

The Dream

Inspired by the messages of his pastor, Rev. Tom Deuschle, and frustrated at his inability to participate in the church’s massive building project, Nigel sought a way of generating huge financial resources. During a time of prayer he claims that he had a divine encounter where he obtained a mandate from God to start Kingdom Bank. He visited his pastor and told him of this encounter and the subsequent desire to start a bank. The godly pastor was amazed at the 26 year old with “big spectacles and wearing tennis shoes” who wanted to start a bank. The pastor prayed before counselling the young man. Having been convinced of the genuineness of Nigel’s dream, the pastor did something unusual. He asked him to give a testimony to the congregation of how God was leading him to start a bank. Though timid, the young man complied. That experience was a powerful vote of confidence from the godly pastor. It demonstrates the power of mentors to build a protégé.

Nigel teamed up with young Franky Kufa. Nigel Chanakira left Bard at the position of Chief Economist. They would build their own entrepreneurial venture. Their idea was to identify players who had specific competences and would each be able to generate financial resources from his activity. Their vision was to create a one – stop financial institution offering a discount house, an asset management company and a merchant bank. Nigel used his Empretec model to develop a business plan for their venture. They headhunted Solomon Mugavazi, a stockbroker from Edwards and Company and B. R. Purohit, a corporate banker from Stanbic. Kufa would provide money market expertise while Nigel provided income from government bond dealings as well as overall supervision of the team.

Each of the budding partners brought in an equal portion of the Z$120,000 as start-up capital. Nigel talked to his wife and they sold their recently acquired Eastlea home and vehicles to raise the equivalent of US$17,000 as their initial capital. Nigel, his wife and three kids headed back to Highfield to live in with his parents. The partners established Garmony Investments which started trading as an unregistered financial institution. The entrepreneurs agreed not to draw a salary in their first year of operations as a bootstrapping strategy.

Mugavazi introduced and recommended Lysias Sibanda, a chartered accountant, to join the team. Nigel was initially reluctant as each person had to bring in an earning capacity and it was not clear how an accountant would generate revenue at start up in a financial institution. Nigel initially retained a 26% share which assured him a blocking vote as well as giving him the position of controlling shareholder.

Nigel credits the Success Motivation Institute (SMI) course “The Dynamics of Successful Management” as the lethal weapon that enabled him to acquire managerial competences. Initially he insisted that all his key executives undertake this training programme.

Birth of the Kingdom

Kingdom Securities P/L commenced operations in November 1994 as a wholly owned subsidiary of Garmony Investments (Pvt) Ltd. It traded as a broker on both money and stock markets.

On 24th February 1995 Kingdom Securities Holding was born with the following subsidiaries: Kingdom Securities Ltd, Kingdom Stockbrokers (Pvt) Ltd and Kingdom Asset Managers (Pvt) Ltd. The flagship Kingdom Securities Ltd was registered as a Discount House under Banking Act Chapter 188 on 25th July 1995. Kingdom Stockbrokers was registered with the Zimbabwe Stock Exchange under ZSE Chapter 195 on 1st August 1995. The pre-licensing trading had generated good revenue but they still had a 20% deficit of the required capital. Most institutional investors turned them down as they were a greenfield company promoted by people perceived to be “too young”. At this stage National Merchant Bank, Intermarket and others were on the market raising equity and these were run by seasoned and mature promoters. However Rachel Kupara, then MD for Zimnat, believed in the young entrepreneurs and took up the first equity portion for Zimnat at 5%.

Norman Sachikonye, then Financial Director and Investments Manager at First Mutual followed suit, taking up an equity share of 15%. These two institutional investors were inducted as shareholders of Kingdom Securities Holdings on 1st August 1995. Garmony Investments ceased operations and reversed itself into Kingdom Securities on 31st July 1995, thereby becoming an 80% shareholder.

The first year of operations was marked by intense competition as well as discrimination against new financial institutions by public organisations. All the other operating units performed well except for the corporate finance department with Kingdom Securities, led by Purohit. This monetary loss, differing spiritual and ethical values led to the forced departure of Purohit as an executive director and shareholder on 31st December 1995. From then the Kingdom started to grow exponentially.

Structural Growth

Nigel and his team pursued an aggressive growth strategy with the intention of increasing market share, profitability, and geographic spread while developing a strong brand. The growth strategy was built around a business philosophy of simplifying financial services and making them easily accessible to the general public. An IT strategy that created a low cost delivery channel exploiting ATMs and POS while providing a platform that was ready for Internet and web-based applications, was espoused.

On 1st April 1997, Kingdom Financial Services was licensed as an accepting house focusing on trading and distributing foreign currency, treasury activities, corporate finance, investment banking and advisory services. It was formed under the leadership of Victor Chando with the intention of becoming the merchant banking arm of the Group. In 1998, Kingdom Merchant Bank (KMB) was licensed and it took over the assets and liabilities of Kingdom Securities Limited. Its main focus was treasury related products, off-balance sheet finance, foreign currency and trade finance. Kingdom Research Institute was established as a support service to the other units.

The entrepreneurial bankers, cognisant of their limitations, sought to achieve critical mass quickly by actively seeking capital injection from equity investors. The aim was to broaden ownership while lending strategic support in areas of mutual interest. An attempt at equity uptake from Global Emerging Markets from London failed. However in 1997 the efforts of the bankers were rewarded when the following organisations took up some equity, reducing the shareholding of executive directors as shown below: ïEUR Ipcorn 0.7%, ïEUR Zambezi Fund Mauritius P/L 1.1%, ïEUR Zambezi Fund P/L 0.7%. ïEUR Kingdom Employee Share Trust 5%, ïEUR Southern Africa Enterprise Development Fund – 8% redeemable preference shares amounting to US$1,5m as the first investee company in Southern Africa from the US Fund initiated by US President Bill Clinton, ïEUR Weiland Investments, a company belonging to Mr Richard Muirimi, a long standing friend of Nigel and associate in the fund management business took up 1.7%, Garmony Investments 71.7% -executive directors. ïEUR After a rights issue Zimnat fell to 4.8% while FML went down to 14.3%.

In 1998, Kingdom launched four Unit Trusts which proved very popular with the market. Initially these products were focused at individual clients of the discount house as well as private portfolios of Kingdom Stockbroking. Aggressive marketing and awareness campaigns established the Kingdom Unit Trust as the most popular retail brand of the group. The Kingdom brand was thus born.

Acquisition of Discount Company of Zimbabwe (DCZ)

After a spurt of organic growth, the Kingdom entrepreneurs decided to hasten the growth rate synergistically. They set out to acquire the oldest discount house in the country and the world, The Discount Company of Zimbabwe, which was a listed entity. With this acquisition Kingdom would acquire critical competences as well as achieve the much coveted ZSE listing inexpensively through a reverse listing. Initial efforts at a negotiated merger with DCZ were rebuffed by its executives who could not countenance a forty year old institution being swallowed up by a four year old business. The entrepreneurs were not deterred. Nigel approached his friend Greg Brackenridge at Stanbic to finance and effect the acquisition of the sixty percent shares which were in the hands of about ten shareholders, on behalf of Kingdom Financial Holdings but to be placed in the ownership of Stanbic Nominees. This strategy masked the identity of the acquirer. Claud Chonzi, the National Social Security Authority (NSSA) GM and a friend to Lysias Sibanda (a Kingdom executive director), agreed to act as a front in the negotiations with the DCZ shareholders. NSSA is a well known institutional investor and hence these shareholders may have believed that they were dealing with an institutional investor. Once Kingdom controlled 60% of DCZ, it took over the company and reverse listed itself onto the Stock Exchange as Kingdom Financial Holdings Limited (KFHL). Because of the negative real interest rates, Kingdom successfully used debt finance to structure the acquisition. This acquisition and the subsequent listing gave the once despised young entrepreneurs confidence and credibility on the market.

Other Strategic Acquisitions

Within the same year Kingdom Merchant Bank acquired a strategic stake in CFX Bureau de Change owned by Sean Maloney as well as another stake in a greenfield microlending franchise, Pfihwa P/L. CFX was changed into KFX and used in most foreign currency trading activities. KFHL set as a strategic intention the acquisition of an additional 24.9% stake in CFX Holdings to safeguard the initial investment and ensure management control. This did not work out. Instead, Sean Maloney opted out and took over the failed Universal Merchant Bank licence to form CFX Merchant Bank. Although Kingdom executives contend that the alliance failed due to the abolition of bureau de change by government, it appears that Sean Maloney refused to give up control of the extra shareholding sought by Kingdom. It therefore would be reasonable that once Kingdom could not control KFX, a fall out ensued. The liquidation of this investment in 2002 resulted in a loss of Z$403 million on that investment. However this was manageable in light of the strong group profitability.

Pfihwa P/L financed the informal sector as a form of corporate social responsibility. However when the hyperinflationary environment and stringent regulatory environment encroached on the viability of the project, it was wound up in early 2004. Kingdom pursued its financing of the informal sector through MicroKing, which was established with international assistance. By 2002 MicroKing had eight branches located in the midst of, or near, micro-enterprise clusters.

In 2000, due to increased activity on the foreign currency front within the banking sector, Kingdom opened a private banking facility through the discount house to exploit revenue streams from this market. Following market trends, it engaged the insurance company AIG to enter the bancassurance market in 2003.

Meikles Strategic Alliance

In 1999 the entrepreneurial Chanakira on advice from his executives and the legendary corporate finance team from Barclays bank led by the affable Hugh Van Hoffen entered into a strategic alliance with Meikles Africa whereby it injected some Z$322 million into Kingdom for an equity shareholding of 25%. Interestingly, the deal nearly collapsed on pricing as Meikles only wanted to pay $250 million whilst KFHL valued themselves at Z$322 million which in real terms was the largest private sector deal done between an indigenous bank and a listed corporate. Nigel testifies that it was a walk through the incomplete Celebration Church site on the Saturday preceding the signing of the Meikles deal that led him to sign the deal which he saw as a means for him to sow a whopping seed into the church to boost the Building Fund. God was faithful! Kingdom’s share price shot up dramatically from $2,15 at the time he made the commitment to the Pastor all the way to $112,00 by the following October!

In return Kingdom acquired a powerful cash-rich shareholder that allowed it entrance into retail banking through an innovative in-store banking strategy. Meikles Africa opened its retail branches, namely TM Supermarkets, Clicks, Barbours, Medix Pharmacies and Greatermans, as distribution channels for Kingdom commercial bank or as account holders providing deposits and requiring banking services. This was a cheaper way of entering retail banking. It proved useful during the 2003 cash crisis because Meikles with its massive cash resources within its business units assisted Kingdom Bank, thus cushioning it from a liquidity crisis. The alliance also raised the reputation and credibility of Kingdom Bank and created an opportunity for Kingdom to finance Meikles Africa’s customers through the jointly owned Meikles Financial Services. Kingdom provided the funding for all lease and hire purchases from Meikles’ subsidiaries, thus driving sales for Meikles while providing easy lending opportunities for Kingdom. Meikles managed the relationship with the client.

Meikles Africa as a strategic shareholder assured Kingdom of success when recapitalisation was required and has enhanced Kingdom’s brand image. This strategic relationship has created powerful synergies for mutual benefit.

Commercial Banking

Exploiting the opportunities arising from the strategic relationship with Meikles Africa, Kingdom made its debut into retail banking in January 2001 with in-store branches at High Glen and Chitungwiza TM supermarkets. The target was principally the mass market. This rode on the strong brand Kingdom had created through the Unit Trusts. In-store banking offered low cost delivery channels with minimal investment in brick and mortar. By the end of 2001, thirteen branches were operational across the country. This followed a deliberate strategy for aggressive roll-out of the branches with two flagship branches ïEUR­ïEUR one in Bulawayo and the other in Harare. There was a huge emphasis on an IT driven strategy with significant cross-selling between the commercial bank and other SBUs.

However, it was further discovered that there was a market for the upmarket clients and hence Crown banking outlets were established to diversify the target market. In 2004, after closing three in-store branches in a rationalization exercise, there were 16 in-store branches and 9 Crown banking outlets.

The entrance into commercial banking was probably held at the wrong time, considering the imminent changes in the banking industry. Commercial banking does provide cheap deposits, however at the price of huge staff costs and human resource management complications. Nigel concedes that, with hindsight, this could have been delayed or done at a slower pace. However, the need for increased market share in a fiercely competitive industry necessitated this. Another reason for persisting with the commercial banking project was that of prior agreements with Meikles Africa. It is possible that Meikles Africa had been sold on the equity take-up deal on the back of promises to engage in in-store banking, which would increase revenue for its subsidiaries.

Innovative Products and Services

KFHL continued its aggressive pursuit of product innovation. After the failure of the KFX project, CurrencyKing was established to continue the work. However this was abolished in November 2002 by government ministerial intervention when bureau de change were prohibited in an effort to stamp out parallel market foreign currency trading.

Sadly this governmental decision was misguided for not only did it fail to banish foreign currency parallel trading but it drove underground, made it more lucrative and subsequently the government lost all control of the management of the exchange rate.

In October 2002, KFHL established Kingdom Leasing after being granted a finance house licence. Its mandate was to exploit opportunities to trade in financial leases, lease hire and short term financial products.

Regional Expansion

Around 2000 it became evident that the domestic market was highly competitive, with limited prospects of future growth. A decision was made to diversify revenue streams and reduce country risk through penetration into the regional markets. This strategy would exploit the proven competences in securities trading, asset management and corporate advisory services from a small capital base. Therefore the entrance had low risk in terms of capital injection. Considering the foreign exchange control limitations and shortage of foreign currency in Zimbabwe, this was a prudent strategy but not without its downside, as will be seen in the Botswana venture.

In 2001, KFHL acquired a 25.1% stake in a greenfield banking enterprise in Malawi, First Discount House Ltd. To safeguard its investment and ensure managerial control, an executive director and dealer were seconded to the Malawi venture while Nigel Chanakira chaired the Board. This investment has continued to grow and yield positive returns. As of July 2006 Kingdom had finally managed to up its stake from 25,1% to 40% in this investment and may ultimately control it to the point of seeking a conversion of the license to a commercial bank.

KFHL also took up a 25% equity stake in Investrust Merchant Bank Zambia. Franky Kufa was seconded to it as an executive director while Nigel took a seat on the Board.

KFHL had been promised an option to gain a controlling stake. However when the bank stabilized, the Zambian shareholders entered into some questionable transactions and were not prepared to allow KFHL to up it’s stake and so KFHL decided to pull out as relationships turned frosty. The Zambian Central Bank intervened with a promise to grant KFHL its own banking license. This did not materialize as the Zambian Central Bank exploited the banking crisis in Zimbabwe to deny KHFL a licence. A reasonable premium of Z$2.5 billion was obtained at disinvestment.

In Botswana, a subsidiary called Kingdom Bank Africa Ltd (KBAL) was established as an offshore bank in the International Finance Centre. KBAL was intended to spearhead and manage regional initiatives for Kingdom. It was headed by Mrs Irene Chamney, seconded by Lysias Sibanda with the concurrence of Nigel after managerial challenges in Zimbabwe. Two other senior executives were seconded there. She successfully set up the KBAL’s banking infrastructure and had good relations with the Botswana authorities.

However, the business model chosen of an offshore bank ahead of a domestic Botswana merchant bank license turned out to be the Achilles heel of the bank more so when the Zimbabwe banking crisis set in between 2003 and 2005. There were fundamental differences in how Mrs Chamney and Chanakira saw the bank surviving and going forward.

Ultimately, it was deemed prudent for Mrs. Chamney to leave the bank in 2005. In 2001 KFHL acquired the mandate as the sole distributor of the American Express card in the whole of Africa except for RSA. This was handled through KBAL. Kingdom Private Bank was transferred from the discount house to become a subsidiary of KBAL due to the prevailing regulatory environment in Zimbabwe.

In 2004 KBAL was temporarily placed under curatorship due to undercapitalisation. At this stage the parent company had regulatory constraints that prevented foreign currency capital injection.

A solution was found in the sourcing of local partners and the transfer of US$1 million previously realised from the proceeds of the Investrust liquidation to Botswana. Nigel Chanakira took a more active management role in KBAL because of its huge strategic significance to the future of KFHL. Currently efforts are underway to acquire a local commercial bank licence in Botswana as well. Once this is acquired there are two possible scenarios, namely maintaining both licences or giving up the offshore licence.

The interviewees were divided in their opinion on this. However in my view, judging from the stakeholder power involved, KFHL is likely to give up the off shore banking licence and use the local Kingdom Bank Botswana (Pula Bank) licence for regional and domestic expansion.

Human Resources

The staff complement grew from the initial 23 in 1995 to more than 947 by 2003. The growth was consistent with the growing institution. It exploded, especially during the launch and expansion of the commercial bank. Kingdom from inception had a strong human resourcing strategy which entailed significant training both internally and externally. Before the foreign currency crisis, employees were sent for training in such countries as RSA, Sweden, India and the USA. In the person of Faith Ntabeni Bhebhe, Kingdom had an energetic HR driver who created powerful HR systems for the emerging behemoth.

As a sign of its commitment to building the human resource capability, in 1998 Kingdom Financial Services entered a management agreement with Holland based AMSCO for the provision of seasoned bankers. Through this strategic alliance Kingdom strengthened its skills base and increased opportunities for skills transfer to locals. This helped the entrepreneurial bankers create a solid managerial system for the bank while the seasoned bankers from Holland compensated for the youthfulness of the emerging bankers. What a foresight!

In-house self-paced interactive learning, team building exercises and mentoring were all part of the learning menu targeted at developing the human resource capacity of the group. Work and job profiling was introduced to best match employees to suitable posts. Career path and succession planning were embraced. Kingdom was the first entrepreneurial bank to have smooth unforced CEO transitions. The founding CEO passed on the baton to Lysias Sibanda in 1999 as he stepped into the role of Group CEO and board deputy chair. His role was now to pursue and spearhead global and regional niche financial markets. A few years later there was another change of the guard as

Franky Kufa stepped in as Group CEO to replace Sibanda, who resigned on medical grounds. One could argue that these smooth transitions were due to the fact that the baton was passing to founding directors.

With the explosive growth in staff complement due to the commercial bank project, culture issues emerged. Consequently, KFHL engaged in an enculturation programme resulting in a culture revolution dubbed “Team Kingdom”. This culture had to be reinforced due to dilutions through significant mergers and acquisitions, significant staff turnover because of increased competition, emigration to greener pastures and the age profile of the staff increased the risk of high mobility and fraudulent activities in collusion with members of the public. Culture changes are difficult to effect and their effectiveness even harder to assess.

In 2004, with a high staff turnover of around 14%, a compensation strategy that ring fenced critical skills like IT and treasury was implemented. Due to the low margins and the financial stress experienced in 2004, KFHL lost more than 341 staff members due to retrenchment, natural attrition and emigration. This was acceptable as profitability fell while staff costs soared. At this stage, staff costs accounted for 58% of all expenses.

Despite the impressive growth, the financial performance when inflation adjusted was mediocre. Actually a loss position was reported in 2004. This growth was severely compromised by the hyperinflationary conditions and the restrictive regulatory environment.

Conclusion

This article shows the determination of entrepreneurs to push through to the realisation of their dreams despite significant odds. In a subsequent article we will tackle the challenges faced by Nigel Chanakira in solidifying his investments.

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