About Caytree Partners
Caytree Partners is an applied research firm based in Nairobi. We offer technology-enabled solutions for practical challenges which individuals and businesses face. Our mission is to empower individuals and organizations to make better decisions through data. Caytree Financial is a practical tool for people who want to manage their personal or business finances. Caytree Academy is an online learning platform which delivers financial management courses on a variety of subjects such as personal finances, credit reference bureaus and business finance. We offer a range of online courses through our website and make the learning process fun and easy.
The Case for Online Financial Education
There has never been a better time in Kenya’s history for engineers, business owners and professionals to undertake the challenge of financial education. The financial sector is undergoing major changes which promise to improve the lives of millions of Kenyans and create great opportunities for consulting engineers. The credit rating system is one example of how engineers and professionals can benefit from online financial education.
In order to reap the rewards of the credit rating system, most consultant engineers and business owners need to understand it as well as the financial habits and decision-making which lead to good credit.Earlier this year, banks, under the guidance of the Central Bank of Kenya, began to submit full-file information about their customers to Credit Reference Bureaus.
This information allows Credit Reference Bureaus to develop credit scores. Similar to those in the United States and other parts of the world, these scores allow lenders to better assess one’s credit risk profile. Banks and other financial institutions are beginning to reward low risk clients with reduced interest rates on loans.
Unfortunately, financial education is not part of school or engineering curriculum. A recent survey on financial management revealed that people’s top sources of money management information are in formal ones such as the internet, news articles and friends. These sources may have their merits, but those who want more authoritative sources for their financial information will find informal sources insufficient.
In addition to improving engineering firms’ finances, it would be wise for managers to provide their employees financial education opportunities,since financial wellness can often have a direct impact on employee performance and productivity. Employees who manage their finances well may be more focused at work. When employees are financially strained, their focus drifts to ways to supplement their income. These problems can decrease employee productivity, increase employee turnover and put undue pressure on compensation reviews.
Debt and the risk of over indebtedness are topics which too few people understand well. It is not surprising that there are many myths that surround the proper use of debt. Financial experts often advise that debt should be viewed as any other financial investment. One should consider, “Is the debt going to provide a return on investment?” and “Will this debt yield a financial return?” For example, obtaining a mortgage to purchase a house is much wiser than purchasing an expensive car with a personal loan as the car will not yield any financial appreciation, no matter how much fun it is to drive.
All too often, people use consumer debt, which is non-investment debt, to fuel lifestyles which are beyond their means. Even if the consumer can afford the loan payments, a sudden life emergency such as the loss of a job can jeopardize those loan payments and, if the consumer has not yet built an emergency fund, the debt can suddenly become financially crippling. Without a proper understanding of prudent debt management, young professionals can very easily find themselves in a financial pit out of which it is very difficult to climb.
As financial education is a major imperative for personal and professional development, the next question is how to best achieve that objective. What is the best way to share the information which people need?The answer is online education. Online education is a global wave which prominent institutions, such Harvard University and more accessible public colleges have adopted. There are many advantages of online education. Students are able to select courses and learn from the comfort of their home, office or even while on the go. Unlike traditional education which follows a set curriculum, online learning allows students to take the courses that they’re interested in and maximize the use of their time.
Online education makes sense for engineering consultants who want to leverage the power of the internet to develop financial knowledge and skills. According to the Communications Commission of Kenya, in 2014, more than half of Kenya’s population has access to internet either through their computer or mobile phone. The proportion of engineers with internet access is even higher. The internet’s continued penetration will make it an important tool for knowledge dissemination and will inspire new ways of delivering content.
Of the many types of courses for working professionals, online learning is particularly appropriate for engineers. Engineers are some of the most technical professionals and have a relatively high proficiency in online-related matters. The learning curve for an engineer taking an online course is much lower than it would be for other professionals who have less exposure to computers. Even if some engineers may not have high fluency on financial subjects, the core related discipline of mathematics means that engineers can pick up financial management concepts relatively easily. As a result, engineers and engineering firms stand to become some of the biggest beneficiaries of online financial learning.
As a result of demanding schedules and heavy workloads, the typical engineer today has little time to engage in non-core training. Online financial education, therefore, offers a compelling avenue for engineers to educate themselves on important financial topics. Engineering consulting firms who sponsor employees to take financial wellness courses online may directly benefit from reduced employee turnover, higher employee satisfaction and a stronger workforce.
Engineers who are involved in managing their firms can also benefit from taking these courses as they will learn about how to manage their businesses’ credit profiles to maintain good credit histories. As banks increasingly integrate credit reports in their lending decisions, financially savvy engineering firms can enjoy direct benefits through favorable lending terms, lower interest rates and better access to credit.
This ability to access loan son good terms will continue to drive the economy forward.Using technology, particularly online learning, is going to be one of the most effective and efficient ways to reach the engineers and other professionals who are increasingly demanding the financial education they need to manage their businesses and newly earned personal wealth.