By Thuita Gatero, Managing Editor, Africa Digest News. He specializes in conversations around data centers, AI, cloud infrastructure, and energy.
The irony of modern capitalism is this: the very rules that were meant to protect us may now be the ones keeping us poor.
Every few months, a shiny new company in Silicon Valley or closer home, a fintech in Nairobi raises billions from private investors. The headlines scream “record funding round!” and “Africa’s next unicorn!” But if you’re an ordinary Kenyan with KSh 50,000 sitting in your savings account, you’re not invited to the party.
By the time that company ever lists on the Nairobi Securities Exchange (NSE) if it ever does, the real money has already been made.
In the United States, there is a growing debate about whether they are living through their own Roaring 20s. Back then, in the 1920s, the stock market soared 90% in a single year before collapsing spectacularly in 1929.
What caused that boom? One word: credit. Before the 1920s, most Americans believed borrowing was morally wrong. Taking debt was considered a sin. But General Motors changed everything.
To sell more cars, GM had a clever idea: Why not lend people the money to buy them?
So they created General Motors Acceptance Corporation (GMAC) one of the world’s first consumer credit companies. Suddenly, ordinary Americans could buy cars they could not afford by paying a small deposit and repaying the rest in installments.
It worked. Car sales exploded. And then the banks noticed. If people could borrow to buy cars, why not borrow to buy stocks?
By 1928, you could buy shares by putting down just 10% of the price and borrowing the rest from your broker. Stocks seemed to rise endlessly, so it felt like free money. But when prices fell, small investors were wiped out and so were the banks that had lent them the cash. That was the sugar rush that led to the Great Depression.
History Repeats in a New Costume
A century later, the same logic is back, this time dressed in the language of technology and “financial inclusion.” Tech leaders and politicians now talk about “democratizing finance.” They say ordinary people should be allowed to invest in private companies: AI startups, crypto funds, or early-stage tech firms before they go public. It sounds fair. It sounds empowering.
But as history shows, democratizing access without democratizing understanding can be financial suicide. Larry Fink, the CEO of BlackRock, which manages over $12.5 trillion, argues that Americans should be allowed to invest their retirement savings in private markets, AI companies, data centers, and venture funds.
His reasoning? “We’re protecting people from getting rich.”
That line stuck with me.
It’s the same argument we’re quietly hearing in Kenya. Think about it: before Safaricom went public in 2008, who really knew about it? Who had early access? By the time the IPO reached the average Kenyan, the insiders, fund managers, connected brokers, politically adjacent investors had already positioned themselves.
Today, it’s worse.
Kenya’s most promising startups, fintechs, logistics firms, health-tech companies raise millions in private rounds that never reach public ears. When they are eventually sold or go public, the windfall goes to venture funds in San Francisco or Sandton, not small investors in Nakuru or Kisumu. The rest of us? We read about it online.
Even our financial system feels rigged toward the elite. Walk into your bank with KSh 50,000 and ask how to invest. You’ll be told to open a fixed deposit account at 8% interest, Kenya’s year-on-year inflation rate was 4.6% in September 2025, an increase from 3.6% in September 2024.
Let’s say someone walked into their bank in October 2024 with KSh 50,000 and took the “safe” advice, putting it in a fixed deposit earning 8% per year.
After one year (by October 2025):
KSh 50,000 × (1 + 0.08) = KSh 54,000
So, they’d have KSh 54,000.
But Kenya’s inflation rate in September 2025 was 4.6%, meaning prices went up by roughly that much.
To see the real value of that KSh 54,000 in 2025 terms:
Real Value = 54,000 ÷ (1 + 0.046) ≈ KSh 51,600
In simple terms:
After a full year of “saving safely,” their KSh 50,000 grew to only KSh 51,600 in real value, a gain of just KSh 1,600.
Now compare that to the NSE elite or private equity investors who doubled their money in the same period on insider IPOs or early-stage buys. Meanwhile, the same bank lends your money at 16% interest, or invests it in government securities paying 12%.
You’re not being “protected” from risk. You’re being fenced off from opportunity.
The elite have access to unit trusts, Eurobonds, private equity, and venture funds, products with higher returns but high entry barriers. Most require hundreds of thousands, sometimes millions, to participate.
To get in, you need connections, accreditation, or inside knowledge, luxuries most Kenyans don’t have.
Regulators say these barriers exist to protect small investors from risky assets. And they are not wrong. Markets can be brutal, and many have lost money chasing hype. But here’s the paradox:
if ordinary people are always protected from risk, they’re also permanently excluded from growth.
That is why the rich get richer not necessarily because they work harder, but because they are allowed to play in riskier arenas.
Democratizing finance should not mean pushing people into speculation. It should mean educating, equipping, and empowering them.
If we truly want to open up wealth creation, we must:
1. Teach financial literacy early not just saving, but investing, risk, and compounding.
2. Create micro-investment platforms that let Kenyans invest small amounts in vetted startups or funds.
3. Increase transparency in private market investments and pre-IPO opportunities.
4. Build regulation that protects without excluding.
Because in the end, protection without participation isn’t safety. It’s polite exclusion.
In 1929, America learned that unchecked speculation destroys economies. But a century later, we may be making the opposite mistake building so many walls that only a few can climb over them. Maybe the question is not whether we are being protected from losing money. Maybe it is whether we are being protected from becoming rich.