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Researcher of the Month; Dr. Freshia Mugo – Waweru – Derivative Markets in Kenya

Inspiration, determination, strength, focus, drive, passion and hope, are just some of the few words that can be used to describe Dr. Freshia Mugo- Waweru, Senior Lecturer at Strathmore’s School of Management and Commerce (SMC).

With a liking for finance, Dr. Freshia is keen on helping the country introduce Derivative Markets, an aspect that will be instrumental to traders not only in the country but internationally. This desire has allowed Dr. Freshia to seat in several committees to contribute to financial change in the country.

The 3rd born in a family of five siblings, is married, and has experienced a lot of support from her beloved husband through her PhD journey.

What is your education Background

I was admitted to Kenyatta University (KU) to study a Bachelor of Commerce majoring in Finance from 2000-2003. I went back to the same university to study an MBA focusing on Finance from 2004-2005. Immediately after, I was privileged to go to South Korea to further my studies in attaining a PhD.  

How did you end up in Korea?

My journey to Korea was rather interesting. When I applied for my Masters at KU I did not have school fees for tuition and therefore, after I got an admission letter my parents requested me to go back to school and ask to postpone the offer, to give me time to work and raise the school fees. I did as I was advised but when the administrator heard of my excuse, he refused to postpone the offer, and advised me to join the school with whatever little amount I had. Therefore the journey through my Masters was full of debt. 


One time while going through the university’s newsletter, I saw an advert on scholarships from Korea, which I gladly applied hoping that this would be the answer to my financial restrains. After my application I did not hear from the sponsors until my last semester of university when I was working on my thesis. The application had been approved, however, for postgraduate and doctorate students the offer required that we study in Korea. I battled with this because I did not want to go away from Kenya, and anyway I was about to complete my Masters so I was not sure what I was going to do. One of the administrators asked me why I did not want to go and I did not have an answer. With that I decided to go.


I was advised to go for six months to learn Korean and after that they asked me to undertake my PhD at Sogang Graduate School of International Studies , Sogang University, in International Finance from 2005 – 2009

Did you want to join Academia?

When I did my research on derivatives market, I desired to be part of the team that will have this dream realized in my country. I knew I wanted to play a big part in imparting this knowledge and academia is the best place to do so.


For Masters’ students I teach Derivatives Market, Managerial Finance, Advanced Investment and Portfolio Analysis, while for undergraduates I teach Corporate Finance and Investment Analysis and Portfolio Management.

What was your PhD Research on?

My research tackled the establishment of successful derivative markets and products in an emerging country. I analyzed the prerequisites a country needs to be in a position to establish this kind of market and what it should do to make the market successful once established. I assessed this through scrutinizing countries that had succeeded and the ones that did not.


My topic was; Introducing Derivatives Exchange; Asia’s Emerging Markets Experiences

Research Findings

I got a number of critical factors important for the country to observe. One of my students picked up the prerequisites and assessed Kenya’s readiness to establish derivatives Market in her thesis. I have presented these findings in several conferences in the country and in international conferences, of where Kenya is, where we should be, and what needs to be done to get there.


I also seat in several committees in both Capital Markets Authority (CMA) and Nairobi Securities Exchange (NSE), and I use these seating’s to give my expertise on derivatives trading and products.

Where are we in Kenya?

We still haven’t established the derivative market. We have made tremendous progress over time though…. because four years ago we did not have a regulatory framework, we did not have infrastructure, and there was limited number of people with knowledge in this area. CMA has worked hard to lay the right foundation, NSE too has invested a lot of resources to prepare for the establishment. The community and stock brokers have also invested immensely to train their people.


Having said that, we cannot rule out impending issues. We always find areas that need some more work. Needless to say, we should not wait for all things to be sorted for us to introduce the derivative market, we should start and we will learn and change things as we go along.


The new NSE chairman recently stated that the new market should hopefully be introduced sometime this year.

What are the benefits of having a derivative market?

Because markets are never predictable, this market works at protecting traders from the fluctuating market prices. With such a market, the cost of certain markets items like exchange rate, and prices of some commodities are locked in even a year before one buys which is a plus for traders.


We also have speculators who use this kind of opportunity to make money through speculation. For the banks, this comes in handy when assessing future trading. It’s of tremendous help to the hedgers most especially. A lot of international communities are waiting for us to introduce this market for speculations.


Not all products will be shielded by this new market when introduced, products with high demand are the ones that will be offered for exchange. The products for exchange can fall in two categories financial products e.g. currency, interest rates, index, single stock etc. and commodities products e.g. grains, minerals, weather, precious stones, coffee etc.

How did you come up with your topic?

I was advantaged in two ways;

  • My supervisor used to be the vice president of the Korean Exchange, hence he was well knowledgeable on this kind of market as he was instrumental in introducing this market in his country;
  • Korea is one of the leading market in the world in Derivatives trading well established in this kind of market to the point where statisticians would sometimes exclude it while assessing to get normal curves.

These factors enabled me to pick the topic much easier.

What challenges did you face while researching?

I faced many challenges;

  • My first product was not a proper angle according to my supervisor, who asked me to change everything after working on it for six months. I was so devastated, I abandoned the project and I left Korea for three months before resuming on the new project.
  • I was doing a study of six different countries (India, Indonesia, South Korea, Malaysia, Taiwan and Thailand) and because I did not know anyone in those countries, I had to rely on phonecalls and emails to get the data. It was such a task, but by God’s grace I managed to get a lot of help from these countries.
  • I needed to collect daily data for the six different countries for a period of 10 years for futures and options. This was a major task. I had to buy another laptop that would be used for collecting data solely, while I use the other one for writing. My husband who was on the other side of the continent (USA) became my official data collector during this period. I learnt a lot patience.
  • Before quitting my job at Incheon International Airport where I worked full time (9a.m -10p.m – Koreans are known for working long hours) I still needed to submit something to my supervisor by morning. So for about six months, I used to sleep for very few hours because I would spend the night researching upto about 6am, sleep for an hour or two then go back to work.

What motivated you to push on?

My desire to see a successful Derivatives Market introduced in my country. I could not give up for the sake of my country. My mother, family and friends would call me and encourage me that they were praying for me. This pushed me further.


I knew I needed to be determined because all these was temporary, one day it would end. That had to keep me going.

What would you advise potential PhD students?

Be mentally prepared for this journey. Get a strong support system of family and friends, even if they do not understand what you are doing, they are instrumental to push you on when you want to give up.


Always remember there is an expiring date to this journey, especially when going through a tough period.  It is beautiful once you finish and you look back and see how far you’ve come. Take one day at a time.


Be passionate about what you are choosing to work on. It is good to be tortured by your passion than by something you are not passionate about.


Finally rely on God fully. Your strength will get somewhere and it gets depleted, but God will give you knew strength every morning. Ask him for his new mercies and grace every morning and that takes you all the way.