It is said that Kenyans in the Diaspora bring in billions of shillings every year in terms of investments. Most of them use their contacts here in Kenya, including family members, to transact. A lot of features have been done of late in the dailies about how Diaspora Kenyans are fleeced by their contacts and agents in the country who perhaps take advantage of the fact that the investor is not physically present to follow up the progress of the investment. One story that I read last week in one of the dailies, led me to do this article on how Kenyans in the Diaspora can minimize the risk of losing their investment, by ensuring that all the loopholes are sealed. A lady working in the US started building her home with the hope of returning home. She faithfully sent money every month towards the construction for a number of years. As far as she was aware the construction was going on smoothly and she was even given frequent updates by her family members. In fact she was shown photos of the almost complete house. Imagine her rude shock when she found out that there was infact no construction and that all the money she had been sending had been squandered. According to the feature, this is a common occurrence. Some Kenyans are lucky to have honest and loyal contacts while others like this lady are not so lucky. What really shocked me from this feature is that the investors feel helpless…they have resigned themselves to fate. I therefore decided to write this article to highlight a few ways in which such risks can be minimised. While the options are not exhaustive…they provide some of the steps to minimize this risk.


Firstly, if you identify an asset to purchase, if possible ensure that the contract and all other title documents are executed in your name. There have been situations of the agents executing the contract documents in their own names and when the new title finally comes out in the name of the agent, the investor is left helpless and with almost no recourse. This is because the land laws state that whenever a title is issued, the person registered as proprietor of that title is deemed to be the true owner of that property. It doesn’t matter what other arrangements that you had with your local agents, the law is on their side. Therefore ensure that the documentation is where possible, in your own name before sending any money towards the purchase.


A second way to minimize risk before sending any money to the local agents is to sign an agreement between you and them. The agreement would set out the relationship between the two parties in so far as the investments are concerned. The agreement should contain a brief description of the intended investment and the manner in which the funds will be sent. The agreement would also contain the obligations and responsibilities of the local agent such that, if he were in breach of his obligations to you then you at least have a document proving the relationship. While most of the monies sent are premised on good faith, it is also important to keep some written evidence. In the event of default by the local agent, then it becomes easier to recover the investment.


One of the best ways to minimize this risk is to execute a power of attorney in favour of the local agent. There are two types of power of attorneys, a general one and a special one. The general one enables the agent to do any and all such things required on your behalf. A general power of attorney is not limited to a particular investment but gives the local agent almost unlimited authority. A special power of attorney on the other hand, gives the agent only limited powers and is specific to one transaction or even one aspect of the transaction. A special power of attorney is more favourable than a general one as it limits the agent’s authority and is specific. In the event of any breach by the local agent and if he goes outside his power by doing what he is not authorized to do under the power of attorney, then recovery is easy as the power of attorney is produced as evidence to show that the local agent exceeded his power.


It is also advisable to use a lawyer when making any investments. Instead of using the local agent, a lawyer can be used. The beauty of using a lawyer is that in the event he does not discharge his obligation well, then a complaint can be made with the Law Society and it becomes easier to recover against him.

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