Why is it easier to gamble than to buy stocks?

The first time I gambled I was drunk as a fish in a Nairobi City casino believing nothing but luck had led my steps from my usual drinking places to an adult candy shop with all these coloured machines.

I was beyond understanding rules on how cards worked and settled on the roulette spinning round the wheel of fortune while the man dressed like a butler explained that each spin of the wheel provides a multitude of options from single numbers, rows of numbers, or on adjacent numbers. A player also may play colors, odd or even numbers, among others. I bought some chips and I cannot remember where I placed them, all I know is that the wheel went on forever tightening my guts and when it settled, I had lost everything.

I have also tried my hand at football betting, long ago which sent me googling the odds of strange football clubs in some Scandinavian countries that I could not point on a map. A few wins here and a bunch of losses there depleted my account and I quit rather than bring more money to the table.

I can understand the excitement of chance, the lure of quick money and why gambling has seized the country’s youth that even President William Ruto wants to set up the national lottery. But even though I’m not really a gambler, I admired how easy it is to make that irrational decision, all I required for gambling was simply my money.

If I were to invest in securities, I needed to visit a broker to set up a Central Depository & Settlement Corporation (CDSC) account, fund it and then give instructions on what stocks to buy. If I wanted a bond, I would need to get a reference, carry some hard Central Bank of Kenya (CBK) card to my bank to see the manager to sign off before they could let me invest not less than Kes50,000. Alternatively, I could get into unit trust, fill in a lot of paperwork just so that I could pay some aggregators to stock pick for me for a guaranteed return.

So when I heard that Egyptian broker EFG Hermes had a mobile platform which you could buy and sell stock from your phone, I thought maybe here’s some gambling competition.

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But lo and behold, the process! They needed me to download and print 21 pages, fill in my details physically and initial each page, scan and upload, along my recent utility bill and certified copies of my bank statements that by the time I set up my account, I had reached out several times on email and calls. If I was not hell bent on opening an account, if I was a gambler with just some money I would have dropped it.

Talking to EFG Hermes Managing Director, Frontier Equity Sales and Head of Equities Kenya Muathi Kilonzo, about the challenges, he said they had to follow the regulations to the latter which was still very much focused on the old way of buying stocks. He said they approached the regulator with a proposition to make the process faster and easier given the regulator also licensed forex traders, a very volatile gambling on currency, offshore stocks and derivatives whose on boarding process was just a click away.

“We approached the regulator and explained the challenge and demonstrated what we were doing. We are doing stocks, which is less risky than the forex traders but their on boarding process was much easier and we were under the same regulator, so they listened and gave us a no objection to automate and make it faster,” Mr Kilonzo said.

The regulator has now approved their streamlined digital on boarding process that requires no paperwork fitted with technology that can detect true selfie, cross reference customer details and allows the retail investors to quickly sign up, transfer funds from M-PESA and use their Safaricom Bonga points to buy shares on the EFG Hermes One Kenya App. Once registered on the App, retail investors can execute trades, access real-time stock quotes, and place, track, review, edit, and cancel open orders.

Joanne Muturi, Purpose Coach from the London Diaspora said they want to invest in the country but have limited information on the opportunities possible besides wiring money to relatives or losing them to scams. She urged EFG Hermes to hold the hands of investors and offer client advise on stock picks.

The choice for investors at the Nairobi bourse keeps growing with the Central Bank of Kenya (CBK) also setting out to make it easier for those wishing to invest in Treasury Bills and Bonds. Starting March this year, any one will be able to bid and buy government paper from just a few clicks in their mobile phone.

“The diaspora, for example, if they need to register to buy bonds or bills, they have to come to the central bank. From next month, once we launch this, they will be able to do that wherever they are,” CBK Governor Dr Patrick Njoroge explained.

So, unlike gambling where the roulette spins away your luck, or a last minute goals spoils your bet, that extra fifty shillings can buy you government securities; a piece of Equity Bank or KCB and earn you yearly dividends.

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