Kenya is a third world country in East Africa that is expanding financially and thus a good country to set up the bank in order to serve the many upcoming businesses. Some of the challenges that I might face in this new environment are:
Having a hard time adapting. I might find it had to adapt to the country because of the differences in time zones. When it is night in my country it is morning in Kenya thus my body may be tired in during the day because it is used to resting at that time.
Another challenge that I might face is the language barrier. Kenya is a country with many ethnic languages thus communicating might be a problem in cases where some of the citizens do not speak or understand English (Fehrenbacher, Schneider & Weber, 2017).
In addition getting around in the city will be a challenge. Since I have never been to Kenya before I do not know any places thus navigating to places will be difficult at first because am not familiar with the area.
Also, the local cuisine offered in the country may not be what I like or what I am used to. Thus finding what to eat on a daily basis may be challenging so I can get food that is used to.
Lastly, the local environment in Kenya is a huge change from mine and therefore adjusting to it may prove difficult. I might find the cities are not busy as what I am used to this I’ll need to adjust to the calmness.
Kenya is a country that is rich in culture and it is their way of life. The country has 42 ethnic tribes all which have different cultures. The most common culture that even tourists travel to go and see is the Maasai culture. The Maasai are an ethnic tribe that has different cultures in their tribe. One that is worldly recognized is the dressing in local African artier. The artier is colorful clothing with rich African graphics and some even have beads embedded. Another huge culture is the eating of roasted meat (‘nyamachoma’) and ‘ugali’ which are both local delicacies that do not miss in occasions or events.
In addition, one culture that Kenya is known for is the art and artifacts. The different ethnic groups craft manually artifacts wood and soapstone sculptures, Maasai beaded jewelry and Khangas which are a local type of clothing. The education system in Kenya is 2-6-3-3-3 which is 2years of pre-primary education, 6 years of primary education, 3 of junior secondary School, 3 of Senior Secondary and then the last three for tertiary school (University). The country really values education and view it as essential not only for the success of an individual but also a nurturing tool in their behavior.
The social way of most Kenyans is farming and selling of farming produce. Most of the food comes from their farms and not from industries. They value farming and in each family, they grow their own produce or rear their own animals such as cows for milk. They have a diverse market in farming and even export the surplus produce.
The Kenyan legal system consists of a mix of Kenyan written law, English Common Law, and elements of the tribal and Islamic law. The legal system is very similar to that found in European or Western countries and this is because they were colonized by the British. The Kenya political system is a republic state where the president is the head of state and they have a multi-party system. The president is elected for a five-year term by the people. Elections are therefore held after every five years.
The Kenya private sector contributes highly to the country’s economy with a contribution of 80% to the overall GDP. The government does intervene in the private sector and it has formed the Private Sector Development strategy whose main aim is to ensure the private sector remains afloat. The government intervenes a lot in the private sector to make sure that it is providing jobs to the unemployed because a high number of citizens are unemployed. Also, it wants to curb poverty which the country faces by ensuring that the private sectors can eliminate poverty by creating jobs that can pay.
This may affect my institutions since I will have to undergo a lot of legal frameworks before setting up the bank. The government will want to ensure that am not taking away from their economy but rather boosting it. Going through the legal system might cause a delay in setting up which is a problem since it will cause the bank to take longer to pick up the thus slower growth of the bank.
Kenya has a mixed economic system which includes private freedom and centralized economic planning and government regulation. This system allows for freedom in the market without interference by the government. Kenya’s economic growth was rapid after independence in 1963 through public investment and smallholder agricultural corporation. However, between 1974 and 1990 the growth declined and this was due to the massive intrusion of the private sector by the government (Junguito & Vargas-Herrera, 2017). This went on until 1993 when the government decided to take a step. The government took a series of economic measures to ensure the growth of the economy and one of this was to have a free market free of governmental intrusion except for key areas in transportation. Thus use of the mixed economic system (Middleton & Kershaw, 2017).
Kenya is involved in international trade through the exportation and importation of goods. Kenya is an agricultural country and thus the surplus agricultural products are exported to other countries (Middleton & Kershaw, 2017). Also, agricultural products are the items that are exported most and contribute to the economy of the country. The agricultural products include tea, coffee, cut flowers, and sugarcane (Miller, 2018). They also import goods that they need such as machinery and transportation products from countries like China (Kawarazuka, Béné & Prain, 2017).
The Kenyan government gets involved in trade issues by setting up of policies that allow people to export and import goods smoothly. For example, they have reduced the tax tariffs, ensure the importation and exportation of legal goods and also the security of goods (Ndung’u, 2017). This will help my financial institution since am assured the safety of my goods in and out of the country by the government (Fehrenbacher, Schneider & Weber, 2017).
Yes, my presence in Kenya will help me in investing in other developing countries because I will have a deeper understanding of the economic situations in developing countries, therefore, know what steps to take. Thus once I want to invest in other developing countries I will know what to expect because I have learned.
Kenya is involved in regional integration by being a member of various integration institutions which are Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Inter-Governmental Authority on Development (IGAD).
I choose Kenya to open my office because it has the highest economy in East Africa and the growth is increasing by the year. Out of the three countries in East Africa, Kenya is the one with the promising growth in the economy thus a good choice to set up the bank (Fan, Amalia & Gao, 2018).
My overall assessment would be that opening an office there is a good investment because the economy of the country is promising and in the next few years, the returns would be good (Brooks, Sangiorgi, Hillenbrand & Money, 2018). The Kenyan economy is growing with more businesses being set up locally and also international companies setting up industries in the area. Therefore it is a promising economic environment (Wójcik, MacDonald-Korth & Zhao, 2017).
Yes, the financial risks are worth taking since they can be overcome.
Yes, it will be beneficial to the shareholders because the returns will be huge.
The best type of presence that will ensure I achieve my objectives is to have an online presence. Majority of Kenyans have access to the internet and spend large amounts of time online from sites such as Facebook and Instagram. Using these platforms to market the bank will be highly beneficial in getting clients (Jedwab, Kerby & Moradi, 2017). Therefore having an online presence will ensure that I reach a large number of people that can invest in my bank (Amutabi, 2017).
The plant will be financed by investors who will become the shareholders.
The foreign exchange requirements I would recommend are
There are no government regulations that would affect earnings and the flow of cash.
The interest rates in Kenya at times are high. This affects our exchange rates in that the high-interest rates attract foreign capital thus increasing the exchange rate (Alesina, Devleeschauwer, Easterly & Kurlat, 2017). On the other hand, lower inflation rates result in increased currency value which causes an increase in interest rates.
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