The Lure of Emerging Markets
By Charles Wanguhu
In original multinational thinking the lack of a significant middle class meant that investment in some emerging markets was considered not viable. The financial crisis has sprung up some few suprises.
While AIG parent company has been largely reliant on US government funds their subsidiaries in Kenya, South Africa and Uganda have been financially strong and have been declaring profits. To further embolden them they have now declared an intention to break away from their parent company AIG inc.
It seems that with initial high risks of working in emerging markets their subsidiaries had employed a robust risk strategy including sufficient reserves. The mother company operating in an increasingly deregulated market seem to have been less cautious. The subsidiaries have consequently recorded profits enabling them survive in the economic downturn and continue to be viable entities.
Eric Aouani, the chief executive of MediCapital Bank (MCB), is banking on continued growth in Africa markets and Making inroads in africa
