HUSTLE ISSUE 002
VOLUME 015
DEC JAN 2018
EAST AFRICA
Africa's business magazine for the entrepreneur
INSIDE 'Made in Kenya' campaign losing steam
GUEST COLUMN: Why millenials have a bad reputation
Dan Kagwe, Post Master General, Posta Kenya.
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CONTENTS
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WELCOME..............................................................................7 QUOTES.................................................................................8 BRIEFS •Safaricom trials new base stations for urban areas ............9 • Copa Coca-Cola cup of nations showpiece comes to Kenya....................................................................................10
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PROGRESSIVE CREDIT •Progressive Credit: Innovative Financial Services Tailored to Fit Your Needs....................................................................11
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GUEST COLUMN •Ever heard of “Avocado Anxiety”? Why Millenials Have a Bad Reputation.................................................................12 ENTERPRENEURSHIP WATCH •Entrepreneur makes a mark in the competitive hospitality industry............................................................................14 •Entrepreneur sweetens earnings with sugarcane juice ....16 MAIN STORY •Posta Kenya: rides on innovation........................................18 •Why Posta Kenya Needs to Innovate..................................21 FEATURE •Nyambura Kinyori: How I Built a Thriving Photo Booth Business................................................................................24
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SPECIAL REPORT • Why ‘Made in Kenya’ narrative is losing steam ................26 •McKinsey shows Africa is the world’s next big growth market .............................................................................28 • Why African countries must leverage their strengths to boost global trade............................................ ................31 • Bancor Launches First Blockchain-Based Community Currencies in Kenya .............................................................32 • Report: Pharmaceutical companies focusing on Africa.....33 • How Microfinance Helps Improve Living Conditions in Kenya...............................................................................34 • ShelterTech Accelerator Kenya: Innovating to deliver better housing............................................................................35 FARMING •Why Africa needs its young people to modernize agricultural sectors ..................... .......................................37
WELCOME MANAGING EDITOR: Amos Wachira WRITER: Jeff Korir MARKETING MANAGER: Wangare Riba BUSINESS EXECUTIVE: Steve Angwenyi SUBSCRIPTION & CIRCULATION: Bill Karani DESIGN AND LAYOUT: Mark Gikonyo ILLUSTRATIONS: Stanislaus Olonde PUBLISHED BY:
Innovation is the central issue in economic prosperity – Michael Porter Dear Readers,
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here’s no denying that innovation is the lifeblood of any organization. A few decades ago, postal corporations across the globe were facing one of their greatest defining moments; their core business, mail delivery, was dwindling. Postal Corporation of Kenya was not an exception.
The advent of the email, it’s easy to see why traditional was becoming outdated. Individuals and companies could communicate faster and instantly. And this explains why most people could only write off Posta’s business model as unviable. The emergence of thousands of courier services keen on eating into Posta’s business didn’t help matters. With few options available, the corporation decided to embrace technology to stay competitive. For the last few years, the corporation has transformed itself into a more efficient, agile and innovative company. Their gamble is paying off, proving that companies can use technology to reinvent themselves. The December edition of Hustle East Africa Magazine provides an insightful cover story of Posta Kenya’s digital transformation. The incisive story can be replicated by many other organizations seeking to redefine themselves.
P.O BOX 12542-00400 NAIROBI CELL: +254 720 806488 EMAIL: info@hustlemag.co.ke
HUSTLE E.A IS PUBLISHED MONTHLY. Views expressed in this publication are those of the authors and do not necessarily reflect the position of the publisher. ©2018 Elite Craft Ltd. All rights reserved. Material may be reproduced only by prior arrangement and with due acknowledgement to HUSTLE EAST AFRICA MAGAZINE.
In our Special Report section, we feature “Africa Arising, a series of stories that provides a macro view of the continent and a detailed outline of how it’s repositioning itself to become the global trade hub that it aspires to be. From Kenya’s stagnant manufacturing sector to pharmaceutical companies’ new focus on Africa, the Africa Rising Narrative is here to say. But what needs to be done to keep the narrative alive? Read on to get the answers. Finally, don’t miss our agribusiness segment that has a compelling story of how the youth should help in modernizing agriculture. Undeniably, agriculture is Kenya’s backbone, but fails to attract more people because the sector is largely traditional. How will the youth change this? An expert weighs in on the topic. Hope you enjoy this issue of Hustle East Africa Magazine. Merry Christmas and a happy new year!
editor@hustlemag.co.ke FB: hustle magazine Twitter: @hustlemag1 www.hustlemag.co.ke
QUOTES
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“Our continued collaboration with Safaricom aims to drive financial inclusion in a digital economy. With our technological innovation and responsible lending principles, we will advertently bring more people into the financial system, encourage more transactions, more savings and, ultimately achieve stronger economic growth,”
“The launch of BlueMoon Coconut flavor is part of a market strategy to meet the evolving consumer needs. As part of our research and development programme, we have invested heavily in the development of flavoured BlueMoon variants.”
– Isaac Awuondo, CBA Group Managing Director.
- Africa Spirits Limited Brand Portfolio Manager, Ascah Ogara
“Currently we control 5 percent of the market but we are determined to increase our market share to 20 percent within the next 5 years. God willing, we shall list the company at the Nairobi Securities Exchange within the next five years,”
“In 2014 we committed to work together to find solutions that would reduce mother and child mortality. We started our work at a time when Kenya was among the most dangerous countries to give birth. Health access, quality and care was the determinant cause of the unacceptable mortality rate among women and children,”
- Tabitha Karanja, CEO, Keroche Breweries.
- First Lady Margaret Kenyatta, founder of Beyond Zero Half Marathon.
HUSTLE EAST AFRICA
hustle briefs
Safaricom Trials New Base Stations for Urban Areas TubeStar Base Stations Will Reduce Land Needed For Base Stations By 75 Per Cent
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afaricom (NSE: SCOM) has today began trial of a new and innovative network coverage technology aimed at enhancing coverage in urban areas. Known as the TubeStar Base Station, the solution replaces the standard tower base station with a tubular structure that occupies up to 75 per cent less the land typically required. In addition, the TubeStar eliminates the need for a compound and perimeter wall around the base station by incorporating all equipment within the tower structure. “Over the last 18 years, Safaricom has established itself as a global innovation leader through constant and deliberate investment in innovative and ground-breaking technologies. Ultimately, our goal has been to provide our customers with
world-class connectivity and networks. The TubeStar base station is the latest such innovation and will enable us meet the emerging demands of Kenya’s fast-paced urban environments,” said Thibaud Rerolle, Chief Technology Officer, Safaricom. The TubeStar is targeted at urban areas which present a space constraint when putting up network towers. Placing standard towers in such locations has been difficult as most landowners have future plans for currently unutilised land or have already put up structures on the entire land leaving little space for a typical base station. The technology also eliminates the need for diesel generators by replacing these with high-performance lithium
batteries, cutting down on pollution and emissions from network sites. The first TubeStar has been deployed at Clay Works along the Nairobi - Thika Highway and will offer coverage along the Roysambu drift which has long been plagued by call drops. The location exemplifies challenges of providing coverage in urban areas as it is a depression where signals from surrounding base stations converge, resulting in interference and poor connectivity. The new base station will exclusively provide coverage in the affected locality eliminating reliance on the other cells. In the last three years to March 2018, Safaricom has invested more than KES 100 billion in upgrading and maintaining its network and plans to spend up to KES 38 billion in the current year to March 2019. Among enhancements it has rolled out in the previous year were East Africa’s first 4G+ network, 4G coverage to all 47 counties, and M-PESA upgrades to a new platform. The company also launched a KES 200 million Research and Development lab and carried out trials on the use of Internet-of-Things technology to help athletes in training. HUSTLE EAST AFRICA
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Hustle briefs
FOOTBALL
COPA COCA-COLA CUP OF NATIONS SHOWPIECE COMES TO KENYA The inaugural tournament is a convergence of soccer talent from around the continent in a move that aims to tap into the immense potential from the soccer lads
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he inaugural Under-16 COPA Coca-Cola Africa Cup of Nations football tournament will be hosted in Kenya in Nakuru County from the 10th to 15th December 2018. The first of its kind continental tournament will be bring together players from twelve African countries to showcase their football prowess. Christened the ‘New Dawn’ in the COPA Coca-Cola annual tournaments, the championship is modelled to liken the Confederation of African Football (CAF) Africa Cup of Nations which will be held in Cameroon in 2019. “Since its inception in Zimbabwe in 1989, the COPA Coca-Cola journey has been exceptional, traversing continents to emerge as a global phenomenon. Once again, Africa will be leading in initiating a youth tournament to showcase grass root football talents,” said Rodney Nzioka – Senior Franchise Brand Manager, Coca-Cola, Kenya. The twelve countries participating in this year’s tournament include; Angola, Malawi, Nigeria, Uganda, Tanzania, Mozambique, Ethiopia, Zambia, Zimbabwe, Botswana, South Africa and the hosts Kenya. “We are delighted to be associated with this platform to harness talent, nurture and give them an avenue to prosper. We are grateful to parents for giving us a chance to develop the next generation of great football stars. The Coca-Cola Company is committed to the success of the tournament and we are looking forward to a great display of talent,” added Nzioka. The need for the continental showpiece has been informed by a vision to grow the tournament from a country level into an international tournament that allows young people to not only play with their counterparts but have the chance to be scouted by recruiters from all over the world.
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Coca-Cola enables people around the world to experience and celebrate their passion for football. The Company has one of the longest corporate partners of FIFA with a formal relationship since 1974 and an official sponsorship of FIFA World Cup™ that began in 1978. “The Coca-Cola Company invested in the FIFA World Cup Trophy Tour 2018 where we visited more than 50 countries including Kenya to bring the World Cup closer to the people. Today, we will be pushing the envelope further to assist soccer players across the continent realize their sporting potential at continental level and to fulfil their dreams of being African Champions in the hope of one day, lifting the prestigious World Cup trophy,” said Ahmed Rady – The Coca-Cola Company Franchise General Manager East Africa. “As the host of the tournament, Coca-Cola in Kenya has partnered with Kenya Secondary Schools Sports Association (KSSSA) to manage the tourney. Their support and involvement has been key to ensuring the success of the tournament. We encourage our media partners, coaches and scouts to walk with us in this journey of unearthing the untapped talent. It is also our hope, that the talented
teens can be drafted for call-ups to every respective national youth teams set-ups,” asserted Rady. Football is rife in the continent with numerous programs taking place across various regions with many considering it as the primary past time. Soccer builds a lot of passion in people. The passion combined with the Company’s commitment to nurture football talent has mooted the COPA Coca-Cola Africa Cup of Nations tournament. Previously, the Company has been taking gifted players for specialized training at the COPA Coca-Cola Global Camp. The inaugural trip was a tour in Rio de Janeiro in Brazil with subsequent tours being in Johannesburg and Durban in South Africa, London-United Kingdom, and Paris-France. Grassroots football is credited to have led the rise of football standards in major football clubs in Europe and across the world. According to FIFA, data obtained from its 207-member associations, in 2007, an estimated 265 million people play football. Of these, 9.4 million youth under-the-age of 18 worldwide were registered in football clubs. The trend may rise only if stakeholders all play a part in development of the sport.
FINANCIAL SERVICES
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Progressive Credit: Innovative Financial Services Tailored to Fit Your Needs
rogressive credit is a non-deposit taking microfinance incorporated in Kenya. We started our journey back in 2011. A month ago, we celebrated our 7th anniversary to mark our milestones. We have 18 branches across the country including 2 branches in Kenyatta Avenue, Nairobi. Others are Kawangware, Thika, Kitengela, Donholm, Ongata Rongai, Ruaka, Githurai 45, Kariobangi, Nakuru, Meru, Mwea, Narok, Nyeri, Mombasa, Embu and Nanyuki. Our head office is located along Kenyatta Avenue, Sanlam house, 3rd floor. We envision to be the most responsive financial institution in facilitating the progress of our customers and the society in general. Our selling preposition is; Quick and Flexible loans. We ensure that we walk our talk by taking every step with our customers. We are proud of our customer service and the good relationship with our customers having retained our customer No. 1 in our book.
Mr. Mbaabu Muchiri, Director, Progressive Credit.
Our mission is seeking to understand our customers by designing innovative product and services to delight them and the society in general. We offer varieties of innovative products such as business loans, loans to salaried people, loans to landlords and landladies, loans to farmers, LPO financing, import duty financing, asset finance and logbook/Auto loans ( Express motor) Our logbook loans are offered within 24hrs and up to 12hrs for those within Nairobi. The applicant only needs to have a motor vehicle and proof of how the loan will be repaid. We are flexible to fit customer needs.
HUSTLE EAST AFRICA
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GUEST COLUMN
By Maria Dima
Millennials are the textbook definition of a paradox: they’re more educated and productive than past generations, yet they accomplish far less
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MILLENIALS
Ever heard of “Avocado Anxiety”? Why Millenials Have a Bad Reputation
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new survey by Goldsmith’s University of London tried to find out millennials firstworld problems and avocado anxiety ranked on the 14th place. One in three millennials stress about whether their avocado is under or over ripe. With these type of worries, it’s no wonder millennials have a bad reputation. I was born in 1987 (what a great year) and theoretically, I too am a millennial. Demographers and researchers typically use the early 1980s as starting birth years and the mid1990s to early 2000s as ending birth years for this Generation Y. Honestly, the kids born in the 80s are worlds apart from those of the early 2000s, but that’s a different story. Nevertheless, all millennials are viewed as mere
numbers in a pessimistic report that includes professional uncertainty, anxiety, depression. That and inventing the selfie concept, of course. More 18-35 year olds are unemployed or out of the workforce now than in the previous three decades. When it comes to career choices, here’s what they’ve been doing wrong: Document their life I’m talking about social profiles. They’ve been emerged in technology for most of their lives and it’s a big part of their reality. If they attend a concert and don’t post a picture of it, it’s like they never went. The need to share any experience with the rest of the world can have its drawbacks related to one’s professional path.
You can’t have a perfect resume and a Facebook page full of nasty, party hard images and expect things to go well with your future career. Broadcasting both the good and the bad, living for likes and the constant need of extra attention can backfire. Recruiters are trying to see if candidates fit their profile and company culture, so they always check social accounts as well. Think about that the next time you post a 4am selfie. Accountability will be a hard thing to sell as a strength if your Facebook page begs to differ. 2. Mindset Millennials are the textbook definition of a paradox: they’re more educated and productive than past generations, yet they accomplish far less. Why? They were born with the idea of uniqueness. They feel entitled to everything just for showing up, yet forget how life really works. Hard work, trial and error, learning and repeat. Millennials are master procrastinators as well. They’re always waiting for the next big thing and for someone else so solve
their issues until then. 3. Social skills While they master every social channel and spend more than 6 hours per day glued to their phones, they are prone to loneliness and social anxiety. Yet another Millennial paradox. In most work environments, networking and team spirits are a must in order to get ahead and have results. You have to be part of something and adhere to the company values. Millennials are highly sociable when they are controlling the environment, but taking them out of their comfort zone can be tricky. Things like small talk, conversation starters, trust and creating real bonds outside a screen are not easily achieved. 4. Consistency Millennials get easily distracted and you can’t blame them. They lose focus easily and have a fear of commitment. They also lack the mere desire to follow through every project and want everything to move like their well known fastpaced environments. This last part is what gets them in trouble. If they don’t see results asap, they lose
interest and move on to something else, instead of figuring out ways of solving the problem or getting over obstacles. Nothing is as important as delivering a great job, day after day, putting in the effort. 5. Goal setting Productivity and speed are two of they’re most valuable assets, yet in the absence of a clear vision and specific (smart) goals those don’t mean very much. Millennials are used to winging it. They’re spontaneous and creative, but only think of solutions for NOW. Not having an action plan for long term success will make you feel lost. They have so many examples of overnight success they end up thinking something will magically knock on their door and it will work out somehow. That somehow is just the illusion of positivity. Millennials, your attitude towards success, failure, work will drive your decisions and shape your future, so make sure you have the winner mindset at hand. Practice it, own it. Take control of your life! The writer is an inbound marketing expert.
HUSTLE EAST AFRICA
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IP
H S R U E N E R P ENTER WATCH
FOOD
Entrepreneur makes a mark in the competitive hospitality industry
Businessman Thomas Musyoki starts small despite financial challenges By Staff Writer
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ntrepreneurs are famous for spotting opportunities and pouncing on them to make a profit. Thomas Musyoki, a budding entrepreneur identified a gap in the hospitality industry in Rongai and set out to fill it. He took a leap of faith and quit his job as a chef in Nairobi a few
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years ago to open his own eatery. Despite the presence of many high end hotels in the neighbourhood, few catered for the needs of majority of people. Musyoki discovered residents were at pains to find a serene and affordable food joint offering a diverse menu. Rich menu Seeing him at Comfort Hotel at the heart of Rongai town and hearing him chat with clients, occasionally serving them, it is hard to believe he is the proprietor of the thriving restaurant. He is calm and collected, which explains why customers make a beeline to sample his rich menu. But besides the radiant
smile is a man who has struggled through entrepreneurship to the point of giving up, but didn’t. He has surmounted hurdle after hurdle in his ascent to the pinnacle of entrepreneurship. Though his hotel is still a small establishment, his journey has been long and troublesome. When he left his job to delve into business, he had no capital. He started out with an informal hotel (kibanda) made of old corrugated iron sheets. Inadequate funds “The first challenge that faces many entrepreneurs is inadequate funds,� he says. Like many other entrepreneurs, Musyoki found himself in similar situation. He had
no money to scale up his business which was thriving. Faced with the challenge of inadequate space occasioned by the large number of customers who patronised his informal food joint, he set out to get credit from local banks albeit unsuccessfully. “It was tough getting anybody to fund my project,” says he. One of his friends, a butcher, introduced him to the micro lender. Musyoki wasted no time visiting a local microfinance institution and, through a group, got his first loan of Sh 25, 000. “I used my first loan to refurbish the joint, which was in dire state of disrepair,” he recalls. With just three employees, his hotel was in a growth path and, before long, he needed more funds to scale up the business. “I went back to the micro lender and they did not disappoint.” After getting his second loan, Musyoki was able to buy stock for his business, a move that boosted his profit margins. A new lease of life With his eyes on the ball, he saved massively. Before long, he qualified for a bigger loan and went for it. With the new loan, Musyoki got new premises for his hotel. Since then, his enterprise has grown in leaps and bounds. He recorded booming business as his joint got a new identity. Now with an extended kitchen and a store to boot, he employed five more staff as his customer base grew. As it stands now, at least forty people can dine at any given time at the newly refurbished facility. This business became Musyoki’s bread and butter. He can comfortably bring up his young children, which he was unable to do a few years back. ”Now I can take my children to better schools.” In the sprawling township of Rongai, his small hotel stands out due to its close proximity to banks and supermarkets. “People enjoy our wide variety of food at affordable prices.” Looking back now, Musyoki thanks the microfinance bank for walking with him when he needed them most. “Whenever I was in problems, they would listen to me. Sometimes business would go down but they could still boosted me with a small loan to kick-start it once more.” “I am sure I can never fail as long as I am with Opportunity Kenya, “he declares.
The hospitality industry in Kenya has experienced a lull recently, but business in small and middle-level establishments has not been majorly affected. In Rongai for instance, a construction boom has prompted huge demand for food and accommodation, as construction workers, investors and visitors throng the area. This has come as a blessing to the likes of Musyoki, who have continued to reap handsomely. Getting loans Though entrepreneurship has benefited from recent campaigns by governments and development focused institutions, the youth are still grappling with the recur-
rent problem of lack of capital to start businesses. Musyoki, having experienced this first hand, advises the youth to take advantage of entrepreneurship, work extra hard, save aggressively and start small businesses. He also urges them not to shy away from getting loans from financial institutions. “There is a lot of money in business,” says he. He attributes his success to a mix of good hygiene, good customer relations, rich variety of foods and responding to customer needs and concerns. Musyoki plans to buy a lorry to enable him stock up his business better. HUSTLE EAST AFRICA
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SUGARCANE JUICE
SWEET PROFITS: ENTREPRENEUR SWEETENS EARNINGS WITH SUGARCANE JUICE
Kilonzo banked on micro credit to fund his new venture. He is now reaping the handsome rewards. By Amos Wachira
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s sugarcane millers continue to get a sour taste in the mouth, one innovative entrepreneur is smiling all the way to the bank, thanks to his new venture: making sugarcane juice. It is a hit with many urban dwellers, already. Patrick Kilonzo has devised a way of minting money from sale of sugarcane juice in downtown Nairobi. Initially a struggling second-hand clothes dealer in Nairobi, he stumbled on the idea last year and sharpened his interest in turning the idea into a viable business undertaking. The sugar cane juice-extracting machine, though not his invention, is gradually turning around his life. Kilonzo got a loan from a micro lender
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in February this year to buy the machine. After trawling the internet looking, he finally bumped into a person who works in China who offered to assist him acquire it at a cost of Sh 80, 000. Since opening his joint in February, he has recorded impressive turnover, with daily sales shooting threefold in the first few days of operation. With hundreds of people queueing daily to savour the sweetness, his business has now proved to be a major success. For instance, Kilonzo, who started with a staff of two, added three to assist at the juice parlour as business soared. Due to record sales volumes, he bought a bigger crushing machine a month later at a cost of Sh130, 000. Today, he sells an average of 400 glasses of the sweet juice, which he blends with other natural additives such as lemon, cinnamon, ginger and aloe vera.
He sells each glass at Sh50. As it stands, the venture has helped him rake enough money for the smooth running of the business. He can now pay a steady salary to five of his employees, and this has catapulted him to the league of young employers, a feat for the youthful entrepreneur who was just an ordinary secondhand clothes merchant a couple of months ago. “It is the best thing I did. I was getting a meagre income from sale of secondhand clothes, but now I am able to grow my revenues exponentially,” explains the jovial businessman as he serves an elderly woman a glass of juice. To most of his customers, the juice is a nutritious thirst quencher especially during the hot season. This explains why even people with medical conditions visit his juice parlour to gain from the medicinal value that the drink possesses. “I usually get repeat clients, some of whom prefer the juice as a way of keeping diseases at bay,” says he. Health benefits Sugarcane juice, a delicacy in most of
Asia and the Americas, is still a relatively new serving in Kenya, as most people are used to buying raw cane or refined sugar in its place. The yellow-tinged juice is said to possess a variety of health benefits. Apart from quickly refilling body fluids and sugars, it also provides instant energy that is required to keep one active and on the go. Though it consists of only sugar, it contains the right sugar - the unrefined variety. Besides sugar, cane juice possesses several vitamins and minerals that provide immense health benefits for people suffering from a variety of conditions. The health-promoting juice has been studied for its role in fighting cancer, stabilising blood sugar levels in diabetics, assisting in weight loss, reducing fevers, clearing the kidneys, preventing tooth decay, and a host of other health benefits. This, coupled with the fact that Kilonzo ensures that general hygiene is strictly observed while the juice is being extracted, explains why hundreds of Kenyans flock to his parlour every day. “I always ensure that my employees maintain the highest level of cleanliness,” he explains. This way, he has managed to stay ahead of competitors. Undoubtedly, Kilonzo’s business model
is a success story. He is now considering replicating his success elsewhere-by establishing more sugarcane joints around the city, and later to the counties. This way, he says, he will be able to create more jobs for the youth. How did he start? “Starting the business was the hard part. I was impressed after I saw someone else making a lot of money from the sugarcane machine and I decided to start it as a business,” says the young entrepreneur. “I tried looking around for any information about where to buy the machine but no one was willing to share the information. I guess most people felt threatened that I might copy their business idea,” says Kilonzo. His only hope lay in the internet. After a short session of searching for the requirements for setting up a sugarcane juice parlour and the benefits of the said juice over the internet, he finally set out to start a similar venture, but with differentiated product offering. By blending the juice with more natural ingredients such as ginger and aloe vera, he reasoned, he would attract clients who valued natural foods as health boosters. He would be a step ahead of existing
players. “We guarantee our clients that ours is a natural drink. No water or chemical additives are added,” he states. He sources most ingredients from local farmers in and around Nairobi, except for Aloe Vera which he gets from Thika. Other than this, Kilonzo gives out free samples of the juice to prospective customers who taste the drink before making a buying decision; a move that he says has borne fruits, as thousands of Kenyans still do not know about sugar cane juice. To further cater for the needs of a section of clients who prefer cold drinks, Kilonzo has a refrigerator which allows him to stock cold juice. He attributes his success to the friendly nature of his employees, who give the clients ‘excellent service.” He says that he had to buy a generator to ensure that he is in business round the clock, considering that his machines are powered by electricity, which is not very reliable in downtown Nairobi. Scaling up the business He is now aiming to buy a pickup truck to cut costs in transportation of cane from the sprawling Wakulima Retail Market. From the look of things, his business model has worked to his advantage, with his only challenge now being to scale up the business to make it more profitable. But establishing a thriving business, he says, is not a walk in the park. Like many other entrepreneurs wishing to start up, Kilonzo struggled to raise seed capital for his business. “I knew I could not afford the machine. I was earning a meagre income from secondhand clothes and there was no hope of finance from banks. I simply did not have the required collateral,” says the obviously satisfied entrepeneur. It was at his moment of need that his bank came to his rescue. “I met microfinance staff and borrowed my first loan through a group,” he explains. Since then, he has graduated from a small timer borrower and can consequently access higher amounts of loans. He advises the youth to come up with unique ideas and start immediately if they want to succeed in any business. His parting shot? “If they do not have capital to start, they can join micro credit institutions and start small. Of importance, they should keep going, no matter what,” he says. HUSTLE EAST AFRICA
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MAIN STORY
POSTAL SERVICE
Dan Kagwe, Post Master General, Posta Kenya.
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POSTA KENYA: BANKING ON INNOVATION
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ince the introduction of the first state-run courier service in the first century AD, global postal services have evolved at a slow rate. For instance, the first ever postage stamp was issued in 1840, almost 2000 years later. For the longest time, the core business of the postal service revolved around delivery of letters to citizens and businesses. But that’s fast changing. The emergence of digitally enhanced entrants in the courier industry has seen most postal corporations across the globe recording declining mail revenues. Indeed, an Accenture study found out that mail delivery contributed 55% of all postal revenues in 2007. By 2015, that figure had dropped to 44%. The emerging and converging technologies and the increased penetration of the mobile phone as well as shifts in local and global scale are putting pressure on postal corporations to digitalize to remain relevant in an ever changing environment. Established through an Act of Parliament (PCK Act 1998), Postal Corporation of Kenya operates as a commercial public enterprise. It boasts of a robust network of postal outlets, totaling to 625. In all the 47 counties, PCK has at least two Post Offices. While these might see to be enough given the geographical reach, they fall below the requirements of the Universal Service Obligation that’s used by all Postal offices across the globe. The USO requires each post office to reach only 6000 persons. In Kenya, each post office serves 70,000 people. “Our mission is to provide innovative communication, distribution and financial solutions to all our customers as we create value for stakeholders,” says Dan Kagwe, Post master General. Postal services are classified as a basic human right by the United Nations Charter. As such, PCK’s role is to provide accessible, affordable and reliable postal services to all citizens, in any part of the country. Even as it continues to deliver on its core mandate, PCK is cognizant of the changing landscape and the trends like electronic mail, which threaten to encroach on the corporation’s core business. With the popularity of e-mails, most
people tend to question the relevance of the post office in the 21st century. Postmaster General Dan Kagwe says that the corporation is banking on innovative digital models, robust foundational strategic and tactical frameworks to stay ahead of the competition. One of its solutions to the dwindling mail revenues is diversification. Essentially, PCK has diversified to provide a wide array of services including courier, clearing and forwarding and financial services. Under mail services, the corporation has corporate mail, Philatelly, private letter boxes and ordinary letters. Courier services include; Posta Cargo, Travel Lite, EMS, and parcel services. Under financial services, it provides money orders, PostaPay, utility payments, agency banking, mobile money transfers among other services. Other than this, it’s utilizing its brick and mortar capacity optimally, by providing the national government, financial institutions and SEs with a n avenue to reach millions of people in t6the last mile through the post office. It has over 500 000 letter boxes that are 90% utilized as of this writing. While private letter boxes are a legal requirement for companies, they also give individuals a sense of belonging. To give customers more value at a time when the electronic mail is becoming the most preferred communication method for companies, PCK introduced the virtual box, a USSD based innovation that enables users to access postal services via the mobile phone or a website. Additionally, the corporation is aiding the growth of ecommerce by providing a last mile hub for companies dealing in courier services. Such organizations struggle to reach people in far flung counties due to infrastructural challenges. Furthermore, Posta Cargo service allows anybody to easily import cargo without worrying about the hectic clearing and forwarding part. It’s a full house logistics solution for customers. PCK is also making inroads into the financial services sector. It’s boosting financial inclusion by supporting agency banking. With over 100 point of sale devices in 470 post offices and a partnership with six banks, the corporation is allowing financial service provides to reach millions
of unbanked people across the country. The corporation is also a national payment gateway for the government. Indeed, the government channels its social protection funds through the Post Office. PCK avails its post offices to be used in service delivery as Huduma Centers, a partnership that has seen the government take its services to the people, even those in far flung areas. So far, half of all Huduma centers are hosted by PCK. The corporation is also partnering with over six banks, including KCB, Equity, Coop, Diamond Trust Bank and National bank to offer agency banking services through the post office. Furthermore, the corporation enhances the growth of ecommerce by providing last mile hubs for the government, citizens and other enterprises. While the decline of mail revenues could have spelt doom for the postal corporation, it didn’t. Interestingly, the number of corporate mail and private letter boxes has been on a growth trajectory. Contributing 70% of PCK’s total turnover the company delivers all manner of letters, including legal documents from the judiciary, bank statements, vital documents like title deeds and log books, company registration certificates and school admission letters. All of these mails require a physical delivery that can only be provided by the post office owing to its huge network across the country. There’s no denying the crucial role that postal corporations play in the ecommerce industry. According to the Universal Postal Union, a UN Specializing agency on postal matters, there are over 600,000 postal outlets across the globe. Combined, these have the power to spur the growth of ecommerce, to enhance financial and social inclusion. So far, the UPU reports that over 1.5 billion people worldwide are actually using financial services provided through the post office. So, what’s Posta’s role in the local ecommerce industry? In recent times, growth in e-commerce has outstripped growth in the posts’ parcel volumes. The key role of the Post in the e-commerce chain is last mile delivery to the customer, and in the face of growing competition in the delivery sector, PosHUSTLE EAST AFRICA
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ta is also providing a payment platform as other ways to profit from e-commerce. They are providing space in their interactive website for customers, which is a powerful tool for online advertising and marketing by the online retail shops both locally and internationally. Through this, Posta facilitates small producers and retailers to start selling online, and in the process make commissions on sales while growing parcel volumes. The Corporation is exploring partnering with Amazon Web Services and Alibaba Group Holding Limited to help local traders and retailers import into the country through its platform and benefit from the last mile delivery logistical services. In addition, Posta ise leveraging on technology to provide value added services such as track and trace of the shipment thus offering the local customer end to end visibility which is geared towards building trust. Their postal networks are extensive, with Post Offices located in every County and most importantly in remote areas. With this in mind, they are piloting digital parcel lockers dubbed Swipbox for a “click and collect” solution for e-commerce, where customer’s items are deposited directly to their Digital box of choice to await collection. This gives certainty to the customer and removes the risk of a failed first-time delivery. More interesting is the concept of setting up hubs at strategic and convenient locations for temporary storage of consignments before collection by the customer. The corporation also intends to reduce on the waiting time between placing an order, shipment and delivery by storing non-perishable items manufactured by big brands in the local stores, for prompt delivery upon successful on-line shopping by the customer. Kenya’s postal Corporation has had a long journey punctuated by impressive milestones. Since 2016, the corporation has grown its product offering to including clearing and forwarding services. Its biggest milestone since then was the clearing, forwarding and distribution election materials for the IEBC in 290 constituencies for the 2017 general election and the repeat presidential elections. They have also modernized and automated all their major outlets by installing Post Global counters and POS systems. Recently, they acquired a fleet of 22 vehicles for operations and service delivery. As far as corporate social responsibility goes, Posta hasn’t been left behind. The
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corporation recently constructed the Kenyatta National Hospital Pediatric Care service waiting bay, in May this years. Despite having diversified into other services, PCK is not resting on its laurels. It continues to unleash innovative solutions, including the Tunza Nyumba Na Posta, a service that links retailers to the consumers of basic household items, through ecommerce. Recent innovations under the Posta brand include; EMS2GO, a mobile application preloaded with all Posta services. It’s designed to be used by over 25000 motor bike riders. Mpost is another innovation that to receive letters by converting their mobile phone numbers into a formal postal address. The most interesting piece of technology, however, is e-Njiwa, a service that enables users to create virtual serial boxes serially running over and above the installed physical capacity. It also allows users to create e-stamps based on QR code technology. Other notable inno-
vations include Posta mobile wallet and Posta digital parcel locker. Financial sustainability is one of the key considerations for any corporation and Posta is not an exception. Despite the lull in the mail delivery business, Posta has been self-sufficient and doesn’t depend on the national government to fulfill its financial obli9ogations. In the financial year 2013/2014, the corporation recorded Kshs17.3 million in profits. In the current year, Posta’s total turnover stands at Kshs4.1 billion. With its diversified units chugging in unison, Posta is raring to become a key pillar in Kenya’s economic and social development. It’s also keen on working closely with the governed to deliver the Big 4 agenda. “Our strategic partnership will soon pay off.” With the enhanced capacity, diversified units and great ambitions, it’s easy to see why the Postmaster General is bullish about this state corporation.
POSTAL SERVICE
Why Posta Kenya Needs to Innovate Postal Corporations across the globe are innovating to stay relevant in a fast evolving industry. It’s no secret; mail volumes, the mainstay of the Post Office, has declined massively over the years due to emergence of new technology and the high penetration of the mobile phone. What is the Postal Corporation of Kenya doing to stay ahead? Hustle East Africa Magazine interviews the Post Master General Dan Kagwe to understand the corporation’s business model. Excerpts herewith. HUSTLE: What is Postal Corporation of Kenya’s Mandate and obligations? POSTMASTER GENERAL: The Postal Corporation of Kenya was established by an Act of Parliament (PCK Act 1998) and operates as a Commercial Public Enterprise. The Corporation’s mandate includes provision of accessible, affordable and reliable Postal Services to all parts of Kenya as the designated Public Postal Licensee, where communications through the Post Office is a basic human right as enshrined in the 1948 United Nations Charter. Our mission is to provide innovative Communication, Distribution and Financial solutions to our customers and create value to stakeholders at all times. Posta Kenya operates in accordance with the provision of section 50 of the Postal Corporation of Kenya Act 1998 (Revised KICA 2013), to provide and operate; a) Postal services, and perform incidental services relating to the receiving, collecting, sending, dispatching and delivery of postal articles and electronic mail, b) Postal financial services, incidental services relating to the issuing, receiving, mobile payments, general electronic agency services, registration & delivery of newspapers and periodicals, collection of bills, virtual saving services and GIRO services, c) Electronic retail transfer and the National Payment system, d) To perform any other duties/functions as the Cabinet Secretary may assign, The Corporation as a Postal Licensee has the monopoly to offer Post Office letter boxes services, issues postage stamps and conveyance of letters below 350 grammes. HUSTLE: What is Posta Kenya’s National Network and Product Portfolio? PMG: The Post Office operates a vast
national network of postal outlets totalling to 625 with a distribution of at least two (2) post offices in each of the 47 Counties. The population served per Post Office is over 70,000. Our overall goal is to improve penetration levels by expanding the postal network to meet the Universal Service Obligation which requires that 6,000 persons are served by one post office. The Post Office provides a wide range of innovative products and services that include but are not limited to the following: 1. Mails Services- Ordinary letters, Corporate Mail, Private Letter Boxes, Philately, and International Mail Services among others. 2. Courier Services- EMS services, Parcels, Post Cargo (Clearing & Forwarding) and Travel Lite. 3. Payment/ Financial Services including Money Order, Posta Pay, Utility/Third Party Payments, Agency Banking services
on behalf of our partners in the Banking sector, Mobile Money Transfer on behalf of Telecommunication companies among others. We are proud that the Post Office provides the much-needed brick and mortar for; a) The National Government –The Post Office currently provides existing infrastructure that hosts over half of the Huduma Service Centres country wide. b) Financial Institutions-PCK is in partnership with six (6) banks namely: Kenya Commercial Bank, Barclays Bank of Kenya, Cooperative Bank of Kenya, Diamond Trust Bank, National bank of Kenya, Equity Bank among others. We not only provide Agency Banking services but much needed physical presence through the existing postal outlets countrywide. c) Small and Medium Enterprises, Youth, Women and Persons With Disability-We envision to boost the role and capacity of the postal network as an enabler of e-commerce, notably by establishing last mile hubs, as partners to the government, citizens and enterprises that are excluded from e-commerce. This will include, especially, Small and Medium Enterprises, Young People and Women who are marginalized and lack affordable access to e-commerce platforms, payment options and delivery possibilities for cross-border e-commerce. HUSTLE: In this era of electronic mail, is the Post Office still relevant? PMG: Yes, of course the Post Office is still very relevant, our mission being to provide innovative communication, distribution and financial/payments solutions to customers and create value to our stakeholders. Allow me to breakdown the relevance in three aspects, anchored on the mission statement: a) Mail/Communication Service-Despite HUSTLE EAST AFRICA
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the digital disruption today, corporate mails and private letters boxes contributes to 70% of our annual turnover. These corporate correspondences that include legal documents from the Judiciary, admission letters, bank statements, certificate of incorporation, vital documents such as log books, title deeds, driving licenses and academic certificates, requires physical delivery that only the Post Office can provide. Regarding international mails, the main flow of cross-border letter posts have historically been between developed countries. However, with an increasing share of citizens in developing countries shopping at online market places, the flow of cross border letter mail is increasing. Therefore, this has reversed the trend in the recent decline in mail volumes. We currently have over 500,000 boxes installed countrywide with capacity utilization at 90%. The post office box (PLB) is not only a legal requirement for company incorporation and a delivery point for mail items, but it provides an identity and a sense of belonging to all citizens. The Corporation has adopted mobile technology to enhance the private letter boxes by introducing the virtual box, where the customer can access the postal services via mobile phone (USSD) and Website. b) Courier/Distribution Services –The Post Office is at the core of last mile delivery, a concept that has proven challenging to retailers and institutions with customers spread all across the country. We deliver to Wajir, Mandera, Lamu, Lokichoggio, Lunga Lunga, Isibania, Mt.Elgon,
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Kacheliba, Turkana among others which are situated in topographically challenging terrains. The Post Office, having identified the need for a seamless importation process, provides clearing and forwarding services and full logistic solutions to customers, importing items through Posta Cargo services. c) Payment/Financial Services - The Corporation supports the unbanked population through Agency Banking by partnering with banks. So far, PCK has acquired and installed one hundred (100) points of sale devices in four hundred and seventy (470) postal outlets out of 625 offices. We offer infrastructure to micro finance institutions as a pay point for collection and disbursement of funds. We are also mandated by law to act as the National Payment Gateway where the Government should channel all payments through the Post Office, which includes Social Protection Funds. We are at advanced stage of partnership with Equity Bank to provide, among other services, disbursement of funds to Older Persons dubbed the Inua Jamii programme. Having explained all these three aspects, you realize that a great number of institutions have appreciated the significance of the robust and resilient postal network infrastructure, our capacity for last mile delivery (e-commerce) and support for financial inclusion to the marginalized and unbanked population. HUSTLE: Comment on the emerging trends of the Postal transformation in
the world arena. PMG: The future of the Post in e-commerce and financial inclusion in providing logistical solutions for last mile delivery cannot be understated. It is interesting to note that 1.5 billion people worldwide are already using the financial services offered through the Post Office. Kenya is a member of the Universal Postal Union (UPU), a United Nations (UN) specialised agency on postal matters. As a specialized agency of the United Nations, the UPU helps its 192 member countries to work towards achieving development of economies, societies and electronic trade, and in narrowing the digital divide. The global Postal network of over 600,000 outlets worldwide is a huge infrastructure which has the power to spur on e-commerce and financial & social inclusion. HUSTLE: What are the main achievements of Posta Kenya since you took over as the Postmaster General in July 2016? i. Independent Electoral and Boundary Commission- clearing, forwarding and distribution to all 290 constituencies of the election materials for 2017 General and repeat elections. ii. Kenya Literature Bureau/Ministry of Education- Distribution of books to schools nationally in January and February 2018. iii. Construction and relocation of EMS Centre/Hub from Posta House to Machakos Road in Nairobi Industrial Area and
POSTAL SERVICE
Kisumu GPO towards facilitating growth, penetration of e-commerce and warehousing. The relocation will reduce on the operational costs and enhance access of EMS Centre/Hub by customers and other stakeholders. The two projects are scheduled to be completed and operational on or before 31st December 2018. iv. Modernization and automation of our major outlets through installation of a POS (Point of Sale), Post Global (Counter Services) and Enterprise Resource Planning systems. v. Roll out of Agency Banking with 5 banks on board (Kenya Commercial Bank, Co-operative Bank of Kenya, Diamond Trust Bank, Barclays, National Bank of Kenya). The integration of Family Bank and Equity Bank among others, are at final phase and look forward for operationalization before the end of the year. vi. Acquisition of 22 official motor vehicles locally assembled for sales (11 Saloon Polos) and operations (11 Isuzu D-max Pickup) to enhance service delivery in line with Universal Service Obligation charter of the United Nations. vii. Partnership with Easy Coach Limited for delivery of International Parcels and last mile delivery of Parcels to Coast Region of Kenya. viii. Corporate Social Responsibility initiative –Construction of Kenyatta National Hospital Paediatric Care Services Waiting Bay-May 2018. ix. PCK Quality Management System (QMS)- ISO Certification has been upgraded from 9001:2008 to 9001:2015. This was done after a rigorous auditing process of the business procedures, processes, policies and regulations, which took place in September 2017.
HUSTLE: What are some of your new innovations riding on ICT? PMG: The Corporation has very attractive innovative services. These innovations include; (a) Tunza Nyumba na Posta- Linking retailers and consumers of basic household commodities through e-commerce which is a value add to our EMS service (b) EMS2GO- is an android mobile application fully loaded with all of postal services and products as a new focal point for engaging with its customers. The service will engage over 25,000 motor bike riders, when it is fully operational (c) Postal Digital Parcel locker - the
latest innovations for e-fulfillment, adding value to the traditional parcel delivery methods (d) Mpost- an innovative product that enables any mobile phone user to use his/her phone to receive letters. It allows you to make your mobile number to be a formal postal address (e) Posta Mobile Wallet- development is ongoing for integration of postal products to a payment platform centered on convenience and relevance in digital space (f) E-njiwa-provides for registration of virtual rental boxes running Serially over & above the installed physical capacity for continuation of Posta’s Rental Box Addresses besides creation of e-Stamps (based on QR Code Technology) (g) Global partnership on e-commerce with Jersey Post and Amazon Web Services. HUSTLE: How is Posta Kenya contributing towards the Government’s Big 4 Agenda? PMG: The Government plans to create 1.3 million manufacturing jobs by 2022 and achieve 100 per cent affordable health care coverage for every citizen. Other key pillars are affordable and decent housing and food and nutritional security: • Employment Creation through Manufacturing-The Corporation has purchased 22 vehicles locally assembled at General Motors and DT Dobie to enhance sales and service delivery. This is in line with Government policy of supporting local manufacturers to create employment. • Affordable Universal Health Care-We provide distribution and logistical solution to pharmaceutical companies, Mission for Essential Drugs and Supplies (MEDS) and other suppliers. Through our EMS Courier service Pharmaceutical drugs are distributed throughout the vast network countrywide. The Corporation has already migrated the entire workforce of 3,000 employees NHIF super cover that was effected 1st July 2017. • Food and Nutritional Security –In order to boost food security, we distribute through our Postal Network of agricultural inputs to farmers countrywide. We also facilitate third party payments to farmers particularly in Western Kenya and Rift Valley Regions. • Affordable and Decent Housing – Through our Postapesa product we are able to provide payment solutions to
real estate firms, contractors and other beneficiaries. HUSTLE: COMMENT ON THE ROLE OF POSTA KENYA IN THE NATIONAL ADDRESSING SYSTEM PMG: We note and appreciate that Postal Corporation of Kenya is a direct beneficiary of the National Addressing system currently being developed by the Government. The Government has put in place a committee of key stakeholders driven by Ministry of ICT and Communication Authority of Kenya to develop the ideal National Addressing System in Kenya. Posta Kenya will be a key beneficiary of the addressing system upon completion, for door to door delivery, thus enhancing e-commerce growth in urban areas. HUSTLE: COMMENT ON THE GENERAL PERFORMANCE OF THE CORPORATION IN THE LAST FINANCIAL YEAR. PMG: We note with appreciation that Postal Corporation of Kenya has never been given any subsidy by the National Government since the split from the Kenya Posts and Telecommunication (KPTC) on 1st July 1999. The Corporation has been financing its operations and capital investments from internally generated funds. In the Financial Year 2013/14, we posted a profit of Kshs. 173 Million and thus declared a dividend to the National Treasury of Kshs. 17.3 Million. In the Financial Year 2016/17 we incurred a loss of about Kshs. 1 Billion, but in the Year 2017/18, our performance in revenue improved, recording an annual turnover of Kshs. 4.1 Billion. This reduced the loss to a marginal figure of less than Kshs. 80 Million against our yearly operating expenditure. The Corporation has an opportunity to improve its business performance if it can be supported by the National Government, who is the sole shareholder, through being mandated as the preferred logistics and financial services provider to Public Agencies. Posta Kenya has also been operating in commercially non-viable areas towards meeting the Universal Service Obligation that all citizens have a right to communicate. In view of this, we qualify for subsidy either from Universal Service Fund or from the National Treasury to meet our obligations as per the PCK Act (1998).
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FEATURE
PHOTOBOOTH
Nyambura Kinyori: How I Built a Thriving Photo Booth Business Hustle: When and how did you start? Nyambura: Having made up our mind, the next step was to set up our business. It was a capital intensive one and we had to rope in a few of our friends to pool resources. Picha Booth opened its doors in March 2015 when we acquired the machine. We started off as four partners but one dropped off in the early stages. Others followed suit in mid 2017 and I was left to run the business. The ability to spot an opportunity and to create a profitable business out of it is one of the hallmarks of entrepreneurship. Nyambura Kinyori has both. While researching for wedding ideas, she stumbled upon a gap in the photography industry and pounced on it. Teaming up with friends, she finally took the plunge in 2015 and launched Picha Booth. The company provides photo booth services for events and parties, including weddings, and birthdays. She talked to Hustle East Africa about her entrepreneurship journey, the opportunities and challenges, and how she intends to make Picha Booth a Pan Africa brand. Excerpts herewith. Hustle: Give us a brief background of Picha Booth Nyambura: Picha Booth is a Nairobi based company that provides photo booth services for any event or party. My partners and I founded this company three years ago when I had just returned to Kenya. I run it as a side hustle as I worked full time as a PR executive, and later as an advertising executive. I resigned in January 2018 to concentrate fully on my business. Hustle: Tell us more about the photo booth Nyambura: The photobooth has two parts; a base, and the main part which has a camera, lights, screen, prompter and speakers which are all synchronized to work together. Our mission is to provide our customers with an ideal way of gifting their guests. They pay for photo
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booth services so their guests can have a fun time. Once we set up a photobooth, guests take photos free of charge which are then printed on the spot. We also have props that spice up the experience. Hustle: How did it all start? Nyambura: When I was staying at the USA, I had a Kenyan housemate who used to insist that we join hands to start a small business back home. I didn’t think I had the entrepreneurship gene. Once I returned to Kenya, I inadvertently came across the idea of a photo booth when I was planning to get married. As I embarked on research for my wedding, I stumbled upon a video of photo booth entrepreneurs. On watching it, I realized that a photo booth was our ideal business idea. Seeing an opportunity, I emailed my former housemate and we set out to start Picha Booth.
Hustle: How does it work? Nyambura: Once we assemble the photo booth, we put up a prop table that has a variety of props that can be used when taking pictures. There’s also a backdrop to enhance the experience. All a person needs to do is to stand in front of the machine. It’s manned by my assistant and takes a series of photos. Hustle: How was the idea received in the market? Nyambura: As this was a relatively new idea, not many people had seen a photo booth. It was tough in the beginning. We knew from the start that we had to create awareness to create a mind shift in the minds of Kenyans. At first, affluent Kenyans and Asians were our clients. A year later, we were getting more clients. Our first event came up in June 2015. The growth has been slow but steady. Over the years, we have been able to add more clients and grow our revenues year on year. Hustle: What makes you stand out? Nyambura: Quality services. Everybody can provide a photo booth but not everybody can provide a good experience. We are professional, and we value our customers that’s why we strive to meet
their needs. We have also invested in quality props. We take time to advice our clients on the best props that work well with the theme of their events because we want them to have the best experience.
Hustle: Any challenges you can talk of? Nyambura: Like with any other business, Picha Booth has its challenges. The biggest challenge was raising awareness about the photo booth. As it’s a relatively new idea, most people didn’t know how it worked. A lot others didn’t know it could be used to create long lasting experiences for their guests. That said, it wasn’t easy convincing people to pay for our services. With heightened awareness, more people are now embracing our services. The cost of materials is also a big challenge as we have to import the printing papers from abroad, a process that’s costly and time consuming. The other challenge has been finding a work life balance. I started this as a side hustle as I worked my 9-5 job. I could only take up weekend bookings, so I didn’t have any family time as most of my weekends were busy. Since going full time, I have now managed to strike a healthy work life balance. Furthermore, we would have loved to expand our business and employ more people but the industry is not growing as fast as we want it to. Finally, I think there’s a general lack of mentorship for local entrepreneurs. If you’re a pioneering entrepreneur, you’ll find that you don’t have anyone to look up to, or a mentor to guide you through the murky waters of entrepreneurship. I think more young entrepreneurs can succeed if they have some mentors on their side. It’s unfortunate that young people have been misled that entrepreneurship is glamorous and that they don’t need to work hard to get rich. Nothing can be further from the truth. For me, I was fortunate enough to join a program called Ongoza which is an accelerator. It has helped me know my strengths and grow the business to what it is today.
Hustle: How much do you charge for your services? Nyambura: We are a premium priced brand with an hourly billing system. For 1-2 hours, it’s Kes16,000 an hour; if you take it for 3-5 hours it’s Kes14,500 and if you take it for more than 5 hours the rate is Kes12,000 an hour. So the longer you take it for, the cheaper it is. But with every package you get unlimited photos and unlimited prints. The social media integration gives you the option to either print or upload directly to your Facebook, Twitter or email. The event host gets the soft copies and the guests take home the hard copies. All packages come with an unlimited number of props and you can customize them depending on the theme of the event. Hustle: Highlight some of your milestones Nyambura: So far, there are many milestones that we boast of as a company. Getting recognized has been one of the major milestones. People recognize our work and nowadays it’s easier to get a client hiring us because they saw our work on social media. We have also expanded our client base and we are doing more events than we did when we started. The service is really popular with weddings and parties and of late corporate events like launches and office parties. Hustle: Did employment prepare you for entrepreneurship? Nyambura: Yes. I believe employment is important as it prepares you for entrepreneurship. By first being an employee, I learnt key lessons of how to run a business. From the basic skills of communicating with clients to business development and marketing, employment hands you the skills to start your own business. Working in the creative space also helped me to package my business well.
Nyambura at a Glance: • Studied Communication at Daystar University • Has a Masters Degree from the USA. Is an Associate of the Chartered Institute of Marketing • Has worked for five years in the PR and advertising industry • Skips on her free time. • Is a member of the Jumprope Association of Kenya
Hustle: Where do you see Picha Booth in the next five years? Nyambura: I foresee a bright future for the company as celebrations are part and parcel of our culture. I would like to grow the company further and expand to the East African region. Of importance, I would like to reach a point where I can manufacture my own photo booths. HUSTLE EAST AFRICA
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SPECIAL REPORT
INDUSTRIALISATION
Africa Rising: Why ‘Made in Kenya’ narrative is losing steam
Kenya dreams of becoming full industrialized by 2030, but its manufacturing sector continues to buckle under the weight of cheap imports By Amoxers Wachira
I
t is easy to think of Kenya as a country that is on the rise. East Africa’s biggest economy, whose economy has been chugging at the steady rate of between five and six percent for the last few years, fits the optimistic narrative of ‘Africa Rising’, marked by thriving economies with improved quality of life for citizens. But in an era when a number of African countries are showing signs of resilience in the face of global market turmoil, Kenya’s economic resurgence cannot be overlooked. The only speck in the country’s stellar show is its sluggish manufacturing sector. The key sector, expected to create jobs for over 35 per cent of the youth who are unemployed is steadily losing steam. Indeed, the sector has stagnated at 11 per cent of the GDP, according to a quarterly report released by the Kenya
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National Bureau of statistics for the year 2016. The World Bank’s policy research working paper dubbed –Deal or no Deal: Strictly Business for China in Kenya? showed that Kenya’s manufacturing sector is declining every year. With the grim statistics, the dream of becoming an industrialized nation by 2030 continues to get a hit. Nowhere is the impact of slowed manufacturing better felt than in Nairobi, the capital city, where tens of factories are closing down or relocating to other regions. They blame the high cost of production, counterfeits, tough business environment characterized by massive layoffs among other reasons for their exits. But analysts warn that this is just a tip of the iceberg. Cheap imports are the main reason behind the slump in the manufacturing sector. In 2014 for instance, battery maker
Eveready shut down its factories in Kenya citing the influx of cheap imports. Tyre maker Sameer Africa is the latest of manufacturers to close down due to proliferation of cheap imports, mostly from China and India. The domino effect is already playing out in most parts of the country. In downtown Nairobi for instance, home to many of Kenya’s burgeoning entrepreneurs, the effects of cheap imports is easily evident. James Waeni sells shoes in one of the many stalls along Price Road. He thrives in thin margins, the reason why he makes occasional travels to China to get his products at a fraction of the local cost. It does not help that shoes can be easily manufactured locally. In fact, a spot check in Nairobi’s Industrial Area, a local shoemaker has slowed down production due to slow sales as wholesalers and retailers continue with their exodus. For Waeni, he knows very well that going for cheap imports kills local manufacturing, but for now, he says it makes business sense. “China-made goods are fast moving compared to locally made products.
They fly off the shelves simply because of cheaper price tags,” says the youthful entrepreneur. He is just one of the many business owners who are moving to China to buy manufactured goods at a cheap price, despite rising concerns about the quality of the products. With this trend, out goes the ‘Buy Kenya Build Kenya’ slogan introduced by the government to spur local production. The ‘Buy Kenya, Build Kenya campaign was kickstarted in June 2015 when Kenya’s president Uhuru Kenyatta promised to enforce policies to ensure increased production and consumption of locally manufactured goods and services. For a start, he announced that 40 per cent of all goods and services procured by the government at all levels should be locally produced. Almost three years down the line, the campaign has borne no fruits. “It has become expensive to do business in Kenya because of costly inputs. Power is expensive compared with our competing countries like Egypt,” explains Dr. X.N Iraki, a University of Nairobi lecturer. Due to the high cost of doing business in Kenya, he adds, multinational firms have no other option but to shut down
their manufacturing units as they look at importing their products from their affiliated firms in other countries, a less costly alternative. It does not help that Kenya’s bilateral trade with China is tilted in favour of the Chinese dragons. According to data from the Kenya National Bureau of Statistics, the value of imports from China stood at Kshs306.47 billion in 2016. At the same time, Kenya’s exports to China averaged Kshs5 billion, revealing a sharp trade deficit. A case in point is in 2016 when China supplied Kenya with railway construction materials, including steel, worth more than Kshs13 billion. Meanwhile, local steel manufacturers face tough times as cheap steel from China keeps them out of business, the downside of this being massive layoffs. Analysts say that Kenya should make re-evaluate its taxation decisions with regard to value added tax, industrial development fee and the railway development fund as they stifle local production, making locally made goods more expensive than imports. Kenya Association of Manufacturers head of steel sector, Kotni Rao, proposes a dumping duty on cheap imports to avert
the trend. Elsewhere, manufacturing stakeholders are scouring for a solution. A manufacturers lobby for instance, is vouching for the implementation of a policy that will promote local industry. The Kenya Association of manufacturers recently launched the Manufacturing Agenda 2017 programme that seeks to increase the sector’s contribution to the economy by 1.6 per cent every year for the next three years. In the same light, a local e-commerce giant, Jumia Kenya recently rolled out an online store dedicated to selling locally made products. But a lot more needs to be done to revive the sector. Kenya Association of Manufacturers chief executive Phylis Wakiaga says that it is easy to peg the turnaround of the manufacturing sector on government policies, but if the policies are not well implemented, they might fail to bring any tangible results. For a start, local consumers need to embrace locally made goods. “There is need to sensitize local consumers about the benefits of buying locally made products. Most of these consumers do not see the link between buying local products and job creation.”
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GROWTH MARKET
McKinsey shows Africa is the world’s next big growth market There is a trillion-dollar opportunity to industrialize Africa, to meet rising domestic demand and create a bridge-head in global export markets By Special Correspondent
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new book by McKinsey confirms that Africa is poised for economic acceleration, akin to the Asian boom. While other geographies are seeing incremental growth, global companies that get in early and join the African champions shaping the right strategies, can sustain double-digit profit growth over the next few decades. In Africa’s Business Revolution: How to Succeed in the World’s Next Big Growth
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Market (Harvard Business Review Press, November 20, 2018) Acha Leke, Mutsa Chironga, and Georges Desvaux detail the research that McKinsey & Company has done and share insights into Africa’s future growth prospects. The conclusions they draw are distilled from 3,000 McKinsey client engagements, in-depth proprietary research and interviews with 40 of Africa’s most prominent business and development leaders. The authors reveal how companies can better understand the African market and seize the opportunities for building profitable, sustainable
businesses. Major trends indicate Africa is poised for explosive growth Africa has a fast-growing, rapidly urbanizing population with big unmet needs. This means there is a trillion-dollar opportunity to industrialize Africa, to meet rising domestic demand and create a bridge-head in global export markets. In addition, there has been a big push by governments and the private sector to close infrastructure gaps. There is a continued resource abundance in agriculture,
GROWTH MARKET
mining, and oil and gas, with innovation and investment in these sectors unlocking new production on the continent. The rapid adoption of mobile and digital technologies could leapfrog Africa past many obstacles to growth. Leke and Desvaux, both Senior McKinsey Partners and Chironga, an executive at Nedbank, one of South Africa’s largest banking groups, say: “With over 400 African companies earning annual revenues of US$1 billion or more, we can identify what works. The highly successful businesses are often African companies, but many are entrepreneurial firms with Western, Indian, or Chinese founders. The most consistently profitable businesses demonstrate a higher tolerance for risk, are eager to adapt their products, production and distribution for African consumers, and commit to investing and building their businesses for the long-term.”
3. Build resilience for the long term – riding out short-term volatility, diversifying portfolios, integrating up and down the value chain, understanding local context and engaging with governments. 4. Unleashing talent – developing skills in frontline workers, creating robust talent development processes and harnessing the power of women’s advancement. Acha Leke says: “At the heart of these four imperatives is a commitment to doing well by doing good. We have had the privilege of meet-
ing and working with many remarkable business leaders from around the world. What has struck us time and again is how many of them are driven by a deeper purpose. They look closely at Africa’s high levels of poverty; its gaps in infrastructure, education and healthcare, and its governance problems. But they don’t just see barriers to business – they see human issues they feel responsible for solving. They show us that contributing to the social and economic development of the countries within which their thriving businesses operate creates value for both shareholders and stakeholders.”
African success stories The book examines several examples of African businesses that have translated opportunities into enduring business value. For instance, it shows how Nigerian conglomerate, Dangote Industries, industrialised to serve regional markets through import substitution and improved margins through vertical integration. South African retail giant, Shoprite, adapted its supply chain and distribution centres for local logistics. SABMiller created products for regional tastes and invested heavily in multiple markets and skills transfer. Technology driven startup, Kenya’s M-Kopa, is providing mobile money financed off-grid solar energy kits. The authors also study global companies which have succeeded in Africa for decades, like Coca-Cola, GE, and Total. Four imperatives to achieve longterm sustainable growth Leke, Chironga and Desvaux believe that building a successful business in Africa requires a long-term approach and four essential practices: 1. Mapping an Africa strategy – setting a clear aspiration, prioritising markets, defining how to achieve scale and relevance and creating an ecosystem to thrive. 2. Innovating business models – truly engaging with customers, creating products and services to fulfill unmet needs, getting lean to drive down costs and price points, and harnessing technology. HUSTLE EAST AFRICA
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INFOGRAPHIC
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GLOBAL TRADE
Why African countries must leverage their strengths to boost global trade If Africa were to increase its share of global trade from 2% to 3%, the one percentage point increase would result in an annual additional income of about US$70 billion By Special Correspondent
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articipants to the 13th African Economic Conference called for African countries to leverage the full range of their strengths and resources to accelerate the region’s drive towards continental integration. Themed “Regional and Continental Integration for Africa’s Development” the 2018 AEC, jointly organized by the United Nations Development Programme, the United Nations Economic Commission for Africa, and the African Development Bank follows the launch of the African Continental Free Trade Area (AfCTA) 8 months ago in Kigali. Speaking during the conference’s opening ceremony, Hon. Claudine Uwera, Rwanda’s Minister of State in charge of Economic Planning said: “Africa’s integration is no longer a choice. It’s a must for the continent and its people. To become the global player that it deserves to be, Africa should integrate speedily.” Experts agree that a self-reliant approach that emphasizes intra-African
trade, would not only help deepen regional economic integration, but contribute significantly to sustainable economic growth, job creation, poverty reduction, and inflow of foreign direct investment. The African Continental Free Trade Area signed in March 2018 by 44 countries is seen as the most ambitious effort to form what has the potential to be the world’s biggest free trade agreement which aims to create a single continental market of goods and services, with free movement of business persons and investments across Africa. Estimates are that if Africa were to increase its share of global trade from 2 to 3%, the one percentage point increase would result in an annual additional income of about US$70 billion. Ms. Ahunna Eziakonwa, UNDP Regional Director for Africa observed: “African countries need to collaborate more effectively in devising public policies that can create skills, foster innovation and technological advancement, facilitate labour mobility and access to productive assets including land and finance.”
Speaking to the urgency of ratifying the AfCFTA, Ms. Giovanie Biha, ECA Deputy Executive Secretary said: “It’s time to ratify to ratify AfCFTA, the more ambitious the liberalization, the higher will be the gains in terms of increase in GDP and exports.” The need for African economies to adopt innovative approaches to finance integration and especially infrastructure development also underscored. Gabriel Negatu, Director General of African Development Bank stated: “We are committed to continue supporting Africa’s integration agenda for it will lead to sustained growth and allow the continent to withstand external pressures; enable African companies to grow and become global giants.” AEC 2018 debates are expected to focus on four main themes: Conceptual underpinning of Africa’s integration; Infrastructure and institution for Africa’s integration; Leveraging private sector for Africa’s integration; Partnerships for effective integration that address impediments to Africa’s regional and continental integration.
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BLOCKCHAIN
Bancor Launches First Blockchain-Based Community Currencies in Kenya The blockchain based community currencies seek to enhance financial inclusion By Amoxers Wachira
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ancor, the decentralized network for digital currencies, is launching the world’s first blockchain-based community currencies in Kenya aimed at combating poverty. The blockchain backed currencies are expected to stimulate local and regional commerce and peer-to-peer economic collaboration. The pilot — which enables Kenyan communities to create and manage their own digital tokens — will utilize blockchain technologies to break down barriers that have historically hindered the use of community currencies worldwide, despite their documented benefits to community members. Bancor is seeding the initial currencies by contributing capital generated from its $153 million token sale in June 2017. The efforts will be overseen from Nairobi by Bancor’s new Director of Community Currencies, Will Ruddick. Ruddick was previously imprisoned while building his non-profit foundation (Grassroots Economics) and its community currency programs, which he later re-launched in partnership with the Kenyan government. Ruddick and his team will utilize the Bancor Protocol to expand Grassroots’ existing paper currency system (serving over 1,000 business and 20 schools in Kenya) into a blockchain-based network. Supporters of the initiative will be able to buy and sell the local currencies using popular cryptocurrencies or a major credit card, allowing users globally to support
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the communities from afar. Bancor’s technology enables users to create digital currencies that hold one or more balances in a connected currency. These currencies, known as Smart Tokens, rely on smart contracts to automate currency conversions and calculate prices based on a currency’s supply, which adjusts dynamically to its use. The unique innovations are already being used to process over $20 million per day in token conversions via the Bancor Network, and are now being rolled out to underserved communities across Kenya. Project plans include: • First pilots to launch in Kawangware and Kibera, the two largest underserved neighborhoods in Kenya. • Grassroots will tap its network of local businesses to circulate the currency by offering discounts and other benefits to customers who use it to transact. • As more people buy and hold the local currency, its market cap will increase, creating wealth and purchasing power for its holders. • A balance in a stabilized “parent” cryptocurrency that is under development will be initially pegged to the national currency (the Kenyan Shilling) and enable convertibility between the network of local currencies at algorithmically calculated prices. Bancor’s founding team previously launched numerous community currency pilots serving diverse communities. A currency for a local community of mothers processed over 1,000 transactions per day at its peak, though activity eventu-
ally tapered off due to the currency not being transferrable outside the group -- a problem that Bancor’s technology aims to solve. Dr. Bernard Lietaer, Co-creator of the Euro and a pioneer in community currencies, joined the Bancor Protocol Foundation last year and will advise the project. Both he and the Bancor team have been outspoken on the potential of community currencies to combat global poverty using a bottom-up approach to sustainable economic development. The efforts come as a number of groups aim to use blockchain and smart contracts to build the next generation of aid and impact investing tools. “We have seen the crypto world generate roughly $300 billion for new currencies, and we believe the same mechanics can be applied to help communities create wealth on a local level through the use of blockchain-based community currencies that fill regional trade gaps, enable basic income and food security, and promote thriving local and interconnected global markets,” says Galia Benartzi, Co-founder of Bancor. Added Ruddick, “Communities should be afforded the same privileges as nations to develop their own prospering economies with the stability of their own currencies.” The Bancor Protocol is overseen by the Bprotocol Foundation, an organization established in 2017 and incorporated in Zug, Switzerland, and claims to process over US$20 million daily in digital currency conversions via its network. Bancor recently welcomed its 100thtoken live on the network.
MEDICINE
Report: Pharmaceutical companies focusing on Africa In 2018, the Index reports that four of these companies are implementing or expanding commercial models in Africa that serve people on very low incomes By Jeff Korir
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he new Access to Medicine Index notes increasing interest from multinational pharmaceutical companies in doing business in Africa that benefits people on lower incomes. However, the 2018 Index also finds important gaps in where pharmaceutical companies are registering new products on the African continent. The Access to Medicine Index ranks 20 of the world’s largest research-based pharmaceutical companies on how they are improving access to medicine in lowand middle-income countries. In 2018, the Index reports that four of these companies are implementing or expanding commercial models in Africa that serve people on very low incomes. Several of these models focus on products for heart disease, diabetes and other non-communicable diseases, which are on the rise globally. • In Ghana, Novartis is working with local private medicinal shops to make blood pressure screening more convenient and to dispense medicines from within the community. High blood pressure (hypertension) is a major risk factor for heart disease and affects up to 36% of adults in Ghana, where long and costly journeys often prevent people seeking the healthcare they need. • In Kenya, Merck KGaA is expanding its initiative to set up local healthcare centres. It is now running in the counties of Kiambu, Kajiado, Machakos, Makueni and Mombasa. These centres each provide pharmacy and nursing services, as well as insurance schemes and financing for healthcare. • In Zambia, GSK is training local people as entrepreneurs who can provide afford-
able health products to their communities, supported by lower interest loans provided savings are passed on. These entrepreneurs sell oral health, pain control, contraceptive and other health-related products, together with goods such as cooking stoves. Capacity building to enable access The Index also reports that African countries are the focus of companies’ efforts to support and build the capacity of local healthcare systems and supply chains. These initiatives are diverse. As an example, Takeda works with the Kenyan Ministry of Health and other partners to ensure more people can access cancer care services. In Ghana, Merck KGaA is working with partners including the government to establish a new local vaccine manufacturing plant. Capacity building efforts are critical for advancing universal health coverage (UHC). “The Index first noted pharmaceutical companies taking a strategic interest in Africa in 2014,” says Gabrielle Breugelmans, Director of Research at the Access to Medicine Foundation, which publishes the Index. “Today, we, see signs that this interest is deepening. The next challenge to ensure the best ideas benefit the poorest people.” Companies generally first invest in capacity building in markets where there is commercial potential. In the Index analysis, Kenya has the most capacity
building initiatives, followed by South Africa and then China. Overall, the Index analysed 141 capacity building initiatives in African countries. The Index analysis only included initiatives that meet local needs for specific capacities and covers 50 of the 54 countries in Africa. Of these, 22 countries have no initiatives that qualified for analysis. Important gaps: are products available? A medicine or vaccine can only be marketed in a country once it has been registered for sale. Yet the Index finds important gaps in the registration of new innovative products in African countries. While some countries have seen new products being filed, such as Nigeria, Ethiopia, Uganda and Tanzania, there are 13 countries across Africa with no new product registrations identified by the Index, including Sudan, South Sudan, Angola and Somalia, which are together home to 150 million people. One factor that promises to improve this situation is the creation of the new African Medicines Agency (AMA), which has been tasked with speeding up the registration process of pharmaceutical products across Africa. “Companies are deepening their focus and working with local partners – we see this as a good sign of long-term commitment to improving health,” says Jayasree K. Iyer, Executive Director of the Access to Medicine Foundation. “To radically ramp up progress, more companies must stay engaged for the long haul.” HUSTLE EAST AFRICA
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MICROFINANCE
How Microfinance Helps Improve Living Conditions in Kenya A new report reveals significant increases in the quality of life among clients who obtain microfinance loans for housing improvements By Staff Writer
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new report from Habitat for Humanity shows that low-income people in Kenya who obtain innovative microfinance loans to improve their housing also experience a significant increase in their quality of life. The report is an impact evaluation study of the Building Assets, Unlocking Access project, a partnership between Habitat for Humanity’s Terwilliger Center for Innovation in Shelter and the Mastercard Foundation. The project helped financial institutions to develop effective housing microfinance products and services. “We know there are strong connections between safe, decent housing and a family’s health and financial stability,” says Patrick Kelley, Vice President of Habitat for Humanity’s Terwilliger Center for Innovation in Shelter. “Through these microfinance products, individuals earning as little as US$50 per month, a population that is typically excluded from banking and financial services, can access affordable loans that will help improve their living conditions and build, extend, or renovate their homes.” In Kenya, Habitat’s Terwilliger Center worked with Kenya Women Microfinance Bank (KWFT) to develop the housing microfinance product Nyumba Smart Loan. The report, which surveyed 1,250 women clients of KWFT over a one-year period, showed that low-income women who accessed the loan increased their overall housing satisfaction by almost 15 percent.
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Findings from the study showed that clients who accessed the Nyumba Smart Loan were able to invest in water and sanitation improvements such as flushing toilets and the installation of safe water sources. Households reported as being mostly happy with the quality of their walls and roofs, the number of rooms in their houses, and the quality of building materials used to construct the houses. Adequate Housing Critical Issue for Many Countries “This impact study demonstrates that the benefits of convenient and affordable housing microfinance can be far-reaching for people living in poverty,” said Ruth Dueck-Mbeba, Senior Program Manager at the Mastercard Foundation. “Having a bank account and the services it offers is a doorway not just to better housing but to a greater sense of well-being for individuals and for communities.” Access to adequate housing for low-income earners is a critical development issue facing many countries around the globe. Kenya, where housing is recognized in the constitution as a basic human right, is no exception. Approximately 61 percent of Kenyans live in temporary shel-
ter or extremely low-quality housing, affecting the overall well-being of households. Over the past few years, the microfinance sector has grown in Kenya to address challenges such as the lack of access to decent housing and formal financial services for low-income people. Housing microfinance consists of small, non-mortgage backed loans starting at just a few hundred dollars that can be offered to low-income populations in support of incremental building practices. Opportunity to Scale Housing Microfinance Through the Building Assets, Unlocking Access project, Habitat’s Terwilliger Center provided technical assistance to six leading financial institutions in Uganda and Kenya to develop housing microfinance products and services. To date, this project has seen more than 69,000 loans disbursed and US$60 million has been mobilized for developing incremental housing finance in these two countries. As part of the project, housing microfinance loans were offered not only to informal workers with unsteady incomes, but also to low-income salaried workers making between US$5-10 per day. Habitat for Humanity believes that housing microfinance can and should become a mainstream offering for financial institutions in Sub-Saharan Africa as they respond to growing housing needs in the region, particularly from people with low income. The business case for developing and scaling housing microfinance has been proven through the work of financial institutions in Kenya and Uganda. The organization firmly believes that this model can be adopted in other parts of Sub-Saharan Africa.
HOUSING
ShelterTech Accelerator Kenya: Innovating to deliver better housing
The ShelterTech Accelerator Kenya brings together entrepreneurs, government, corporations and development partners in mapping out and showcasing innovation in improving access to shelter By Jeff Korir
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abitat for Humanity’s Terwilliger Center for Innovation in Shelter recently launched its first ShelterTech Accelerator Kenya program. It aims to facilitate housing markets better meet the needs of the low-income households and seeks to identify, nurture and accelerate Kenyan start-ups and growth-stage companies that are bringing shelter products and services to the low-income household market. The ShelterTech Accelerator Kenya, is implemented by BDO East Africa in partnership with Pangea Accelerator, a platform connecting African startups with international investment and expertise and Strathmore University’s @iBizAfrica. It is supported by the IKEA Foundation and the Hilti Foundation. Access to adequate housing for low-income households is a critical development issue facing many countries around the globe. Kenya, where housing is recognized
in the constitution as a basic human right, is no exception. Approximately 61 percent of Kenyans live in temporary shelter or extremely low-quality housing, affecting the overall well-being of households. The ShelterTech Accelerator Kenya brings together entrepreneurs, government, corporations and development partners in mapping out and showcasing innovation in improving access to shelter. With over 94 applications from across Kenya, the program launch will unveil 30 start-ups and scale-ups selected to undergo a six-month acceleration program, giving them access to expertise, networks and the chance to win investment of up to US$50,000 into their business. The program will run from November 2018 until May 2019. “The ShelterTech Accelerator Kenya will contribute to the government of Kenya’s affordable housing pillar that aims to have at least 500,000 affordable homes in all major cities while ensuring 350,000 people get jobs in the housing sector by 2022,” says Jane Otima, Habitat for
Humanity’s Associate Director for Market Systems and Entrepreneurship. According to BDO’s CEO Sandeep Khapre, the ShelterTech Accelerator program is an innovative initiative that will facilitate achievement Habitat for Humanity Terwilliger Center for Innovation in Shelter’s objective to Build and Expand Inclusive Housing Markets. According to Pangea’s CEO Jonas Tesfu, the startup ecosystem continent-wide, if given the right tools and means to invest is as vibrant as any other industry across the globe. Jonas notes that Africa remains very attractive as a new startup frontier, “Africans and non-Africans alike are looking to be part of its rapid development and are seeking ways to make this happen.” Habitat for Humanity’s Terwilliger Center for Innovation in Shelter views the ShelterTech Accelerator as an efficient and structured mechanism of evaluating large numbers of ventures with the aim of building a strong entrepreneurial ecosystem in the still nascent affordable housing space. The program is making its Africa debut in Kenya, joining previous successful implementation in Mexico and current implementation in India. HUSTLE EAST AFRICA
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FARMING
JOB CREATION
Why Africa needs its young people to modernize agricultural sectors Food and Agriculture Organization (FAO) Director-General stresses the importance of creating jobs in rural areas By Special Correspondent
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igration, both to urban areas and abroad, risks depriving African countries of the young people they need to modernize their agriculture sectors, which are key to achieving growth and prosperity, FAO Director-General José Graziano da Silva has said. “It is crucial that African countries also look at rural areas for agro-industrialization that can provide more opportunities for young people to find employment and remain in small villages and rural areas,” Graziano da Silva said, pointing to a recent FAO report showing that those who migrate from rural to urban areas are five times more likely to move abroad. He made the remarks at the Italy-Africa Ministerial Conference in Rome, which included foreign ministers and other officials from more than 45 African
Countries, as well as representatives from the African Union, other international organizations, and the private sector. During a panel discussion at the Conference, FAO Director-General noted that economic growth in many African countries has slowed down in recent years and that the impacts of climate extremes have intensified, while conflicts continue to cause social disruption in some areas. He stressed that in this context, it is important for countries to define joint strategies and implement common actions, such as the recently approved African Continental Free Trade Area. In particular, agro-industrialization can contribute to addressing Africa’s historical dependency on food imports, the FAO Director-General said. Investing in infrastructure Paving the way for agro-industrialization requires that we “urbanize rural
José Graziano da Silva, DirectorGeneral, FAO.
areas,” and this means providing small villages with basic services, such as education, health, electricity, and internet access, which, Graziano da Silva noted is “one of the main attractions for youth nowadays”. “Small villages should be the place where farmers buy seeds, send their children to school, and turn to medical care and other services when necessary. In Africa, it is very important to revitalize small villages through small agro-industries and cooperatives of family farmers,” he said. More investment in infrastructure is also important to connect producers, processors and other segments of the food value chains. This includes roads, transportation, storage capacity, energy, as well as water management. These measures are key to creating job opportunities not only in agriculture production, but especially in various non-farm activities, such as services provision in general and rural tourism, the FAO Director-General stressed. The private sector, a crucial partner The private sector, Graziano da Silva added, is a crucial partner, particularly in building the necessary infrastructure for economic growth and development. He underscored that FAO has established more than 150 strategic partnerships with non-state actors, 50 percent of which are with private sector companies. Through its relation with the private sector, FAO has mobilized knowledge, technical expertise, political support, in-kind donation and other resources, mainly in support of the poorest countries and communities. HUSTLE EAST AFRICA
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