Don’t invest in a business you don’t understand, experts advise

Financial experts have advised Ugandans to refrain from investing into any business without fully understanding its dynamics to avoid heartache.

The remarks made during a webinar organized by UAP Old Mutual, an insurance company in partnership with PostBank on a financial wellness class under the theme: "Learn, grow, protect your finances."

Speaking during the webinar, Prof. Samuel Sejjaaka, a finance expert and a board member at UAP Old Mutual,said many people get into a business because they have heard someone talking of being successful in such a business.

"The first thing is to understand the business. Have you got the basic knowledge of what should be done in that business? Don’t invest in something that you don’t understand," he said, adding that many people have got in trouble because they failed to understand the business.

Jonan Kisakye, the chief executive officer of Uganda Insurers Association (UIA) advised Ugandans that their first saving and investment should be in insurance products, adding that this is a crucial thing which has never been given attention by many people.

"That is the first saving product you must take... an insurance product because the benefits far outweigh the premium you are going to pay. If we are going to change the saving and investments culture, we must encourage people to take up insurance," he noted.

Regarding the high interest rates, Julius Kakeeto, the managing director at PostBank Uganda, said the rates are based on market rates and it is a factor of supply and demand.

"Our interest rates don't change with change in the economy, they are fixed for our borrowers. For our customers, interest rates went up but they did not feel anything," he said.