Hustle East Africa August 2018

HUSTLE ISSUE 002

VOLUME 014

AUGUST 2018

EAST AFRICA

Africa's business magazine for the entrepreneur

INSIDE

HF Group’s Digital Transformation Takes Shape

SUFURIA WOMEN DEFY ODDS TO SCALE HEIGHTS OF SUCCESS

Turning a hobby into a thriving business

KICKING POVERTY OUT OF KENYAN SLUMS

UPLIFTING SMALL SCALE TEA FARMERS

Inside Kenya’s clean energy revolution

Kenya’s gambling problem

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IN TECH: Unbanked? Here’s the Digital banking Remedy

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CONTENTS

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WELCOME..............................................................................7 QUOTES.................................................................................8 BRIEFS

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•African Women Leadership Fund to bolster women-owned businesses................................................................................9 • Ecobank announces finalists of the Ecobank Fintech Challenge 2018.......................................................................9 •Uganda is the first African country to de-risk small and medium scale renewables....................................................10

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TECHNOLOGY •Unbanked? Here’s the Digital banking Remedy.................11 DIGITAL BANKING •HF Group’s Digital Transformation Takes Shape................12 ENTERPRENEURSHIP WATCH •Sufuria women defy odds to scale heights of success.......14 •Women group sets out to transform members lives.........16 •Former herdsboy builds thriving cooking stove enterprise.........................................................................18 •Turning a hobby into a thriving business..........................20 SPECIAL REPORT

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•Kicking poverty out of Kenyan slums.................................22 •Kenya’s gambling problem..................................................26 MAIN STORY •Inside Kenya’s clean energy revolution..............................28 •4th Green Growth Conference............................................31 •Kenya hosts the Fourth National Green Growth Conference............................................................................32 GUEST COLUMN •Integrated Soil Fertility Management; A Solution to Food Insecurity...........................................................................35 FARMING •Uplifting small scale tea farmers........................................36

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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:

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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.

Kenya’s ‘greening economy’ takes shape Dear Readers,

K

enya’s energy sector has attracted keen attention in recent years.

Hobbled by power generation and distribution issues, the sector has been found wanting in delivering reliable power for the industrial and domestic needs of the country.

The government’s efforts to deal with power shortfalls have seen it turn to the private sector to deliver new plants and also explore entirely new avenues of production, such as solar and coal.

Enter alternative energy sources and the green economy looks like its getting into shape. In the August issue of Hustle East Africa magazine, we look at the takeaways from the recently held Green Growth Conference that was planned and executed by Micro Enterprises Support Program (MESPT) and other partners. What are the crucial steps that Kenya must take to evolve into a green economy?

What future does Kenya’s small alternative energy producers hold? We have the answers.

Also in this issue, we are highlighting some of Kenya’s most resilient micro and small entrepreneurs. They have beaten great odds to succeed in business.

Be sure to read the stories from our newly introduced segment, “Entrepreneurship Watch” that will be serving you refreshing entrepreneurship stories straight from the boiling pot of entrepreneurs.

As always, enjoy these and many other stories in our August edition.

Enjoy the read!

editor@hustlemag.co.ke FB: hustle magazine Twitter: @hustlemag1 www.hustlemag.co.ke

QUOTES

“Be a risk taker; be willing to put in extra hours to grow your business, and do not do it just for the money because financial success will not happen ovwernight.”

– Vimal Shah, Businessman, Entrepreneur, Mentor and Industrialist

“Many People either have results or reasons; decide today the kind of person you want to be’ one who delivers results or always has reasons for not having results. With results, success is the next step.”

Centum CEO James Mworia

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“People buy people. You cannot run a successful without people. Get the right team, train it and take care of it. Share your vision with your team. This will assist you in building a succesful business.,” George Wachiuri is the founder and C.E.O Optiven Group.

“Community currencies can be thought of as a voucher that helps people exchange goods and services in poor income areas where there is little currency circulating by the middle of the month. It is quite a low cost way of reducing poverty,” Dr. Radha Upadhyaya, a lecturer at the Institute for Development Studies

hustle briefs Ecobank announces finalists of the Ecobank Fintech Challenge 2018

T A woman entrepreneur.

African Women Leadership Fund to bolster women-owned businesses

T

he side event was held at the 31st Summit of the African Union Heads of State ECA’s Executive Secretary, Vera Songwe announced that plans are underway to set up the African Women Leadership Fund to help speed up the growth of women-led businesses around the Continent.

Speaking in Nouakchott at a joint AUEU High Level side event titled, “Women in Power”, Ms, Songwe said, “Depending on the resources we raise, and with our target being five hundred

ECA’s Executive Secretary, Vera Songwe.

million dollars, we will create a network of young women fund managers, train them for two years and put them out in the market.”

The innovative Fund seeks to address the fundamental gap in the access of women to finance architecture. As such, it will seek to lower the hurdles of womenowned businesses, promote investments in micro enterprises and take women’s cooperatives to the next level.

The Fund complements the Africa Women’s Fund of the African Union, the Graça Machel Trust, and other similar mechanisms. It will focus on mobilizing global capital to build a cadre of African women fund managers who will, in turn, invest in and develop African women-led businesses and micro-businesses.

“We are hoping to have as many women running these funds as we have men”, said Ms Songwe.

The side event was held at the 31st Summit of the African Union Heads of State.

Present at the meeting was President Paul Kagame of Rwanda; UN Deputy Secretary-General, Amina J Mohammed; and the Chairperson of the African Union, among other representatives of partner institutions and member states.

he Fellowship will run for a period of six months during which Ecobank Fintech Fellows will benefit from an opportunity to further explore partnerships with the Ecobank Group An Innovation Fair & Awards ceremony will honour the start-ups on August 30, 2018 at the global headquarters of Ecobank in Lomé, Togo.

At the ceremony, the start-ups will exhibit and pitch their products to a jury for the Ecobank Africa Fintech Prize, which will be awarded the top innovator and two runners-up. The top three innovators will win cash prizes worth US$10,000, US$7,000, and US$5,000 respectively.

After the Awards ceremony, Ecobank will enroll all eleven finalists into the Ecobank Fintech Fellowship. The Fellowship will run for a period of six months during which Ecobank Fintech Fellows will benefit from an opportunity to further explore partnerships with the Ecobank Group that includes: Multinational product roll-out support: for the start-ups deemed commercially viable to grow their businesses across any of Ecobank’s 33 markets in Africa; Service provider & ecosystem partner deals: for start-ups with deep capabilities to become product partners within Ecobank’s ecosystem; Technical & mentoring support: during the six months fellowship period, fellows will benefit from technical support from Ecobank’s global network of technology leaders, fintech experts, investors and management coaches.

The eleven start-ups are: Lypa (Kenya), Wallet.ng (Nigeria), Nala (Tanzania), Litee (Benin), SESO Global (South Africa), InvestED (Sierra Leone), Eversend (France), Secapay (Nigeria), Virtual Identity (South Africa), MojiPay (Togo), Awamo (Germany)

HUSTLE EAST AFRICA

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Hustle briefs

SOLAR

Uganda is first African country to de-risk small and medium scale renewables under the German and ATI-backed RLSF initiative The move reflects Uganda’s commitment to ensuring the viability of small and medium-scale renewable energy projects

U

ganda becomes the first African country to sign an agreement with the Regional Liquidity Support Facility (RLSF), a joint initiative of the African Trade Insurance Agency (ATI) (www.ATIACA.org), a Pan-African and multilateral guarantor and KfW with funding from German Ministry of Economic Cooperation and Development. Under the program, RLSF will offer protection to new small and mid-sized renewable energy projects (up to 50 MW) in Sub-Sahara Africa.

The World Bank estimates that the continent needs to generate annual capacity of 7,000 MW but such a ramp-up in generation capacity cannot be achieved without private sector participation. The RLSF, as a pragmatic option, could therefore become a more widely used solution to solve Africa’s energy deficit challenge.

The RLSF has an initial capacity equivalent to USD74 million and will protect Independent Power Producers (IPPs) against the risk of delayed payments by public off-takers. This type of guarantee is a common requirement from the banks

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that fund the projects. Many projects have failed in the past to access funding because this guarantee was not available.

The move reflects Uganda’s commitment to ensuring the viability of small and medium-scale renewable energy projects.

Speaking during the signing ceremony, Honorable Matia Kasaija, Uganda’s Minister of Finance, Planning and Economic Development commented on the government’s commitment to improving conditions for investors within the energy sector – “Uganda has a solid history of supporting our public concession with upwards of USD500 million spent in the last decade on improvements to the grid.

With this agreement, we see RLSF providing a perfect complement to our on-going strategy of accelerating the delivery of clean energy to the national grid.”

Uganda is seen as an ideal market based on the relatively high number of viable Independent Power Producers (IPPs).

The country has also benefited from the GET FiT program, which is an existing energy-sector initiative managed by KfW on behalf of Government of Uganda, that

supports countries to develop a standardised set of documentation for power projects and an enabling regulatory framework for IPPs. This gives the necessary comfort to developers and lenders to invest in renewable energy projects. GET FiT has been a success in Uganda, attracting 19 IPPs in the last five years.

Under the RLSF program all renewable IPPs that have not reached financial close, as well as new IPPs can apply for the product.

“RLSF is a tool that can ensure more renewable energy projects reach financial close. For Africa, small and mid-sized projects may be a better fit to the current environment requiring less financing and they can be implemented much quicker.

This could be a model that works in many other African markets that may just pave the way for an expansion of the facility or other such initiatives,” noted George Otieno, ATI’s Chief Executive Officer.

The agreement was signed by Hon. Matia Kasaija, Minister of Finance, Planning and Economic Development, Hon. Irene Nafuna Muloni, Minister of Energy and Mineral Development, Mr. Willy.

K. Kiryahika, Managing Director & CEO, Uganda Electricity Transmission Company (UETCL) and Mr. George Otieno, CEO, African Trade Insurance Agency (ATI).

TECHNOLOGY

Unbanked? Here’s the Digital banking Remedy

By EY

O

ne-fifth of the world’s population are unbanked.

Historically, it hasn’t been economically viable to provide financial services for these individuals, as they didn’t meet the minimum profitable threshold for most financial institutions. A number of reasons have combined to produce this situation, not just in developing economies but also in developed ones such as the US and UK. The introduction of new technologies has the potential to lower the cost of overcoming the hurdles that stop people entering the banking world –­ be they geographic or regulatory inaccessibility, product mismatch, or a lack of trust – transforming the formerly unbanked into valued members of the formal economy and supporting economic growth for all.

Emerging markets are already embracing innovative technology and developing policy to increase financial inclusion.

This is no surprise when you consider the estimated US$200 billion opportunity they represent (pdf). But the individuals classed as unbanked don’t all share the same situation. Some lack access to banking institutions, while others simply have needs that existing products don’t address. Even given a conducive environment, banks operating in these markets need to tailor their existing offerings to successfully achieve profitable financial inclusion.

One problem is onboarding people who have never had access to banks or credit.

How do you get them to trust banks with their money, and vice versa? Banks are now able to offer emerging markets innovative solutions, such as PNB MetLife Insurance’s JKB Family Protection Savings Bank Account that bundles low-cost insurance protection with the benefits of a savings account. The bank expects this product to generate new business prospects of up to US$2 billion and foster trust among customers – many of whom will use credit products in the future.

Channel innovation is also key. Digital channels can provide greater convenience

for customers as well as lowering the cost for banks, and have been instrumental in helping providers overcome challenges related to infrastructure and geography.

In Kenya, Musoni, a digital microfinance institution, uses a mobile platform to disburse loans within 72 hours and collect payments. In Bangladesh, the payment company bKash allows people to exchange hard currency for e-money through a network of community-based agents. This can then be used to transfer money to others, receive money, and buy mobile airtime.

Effective financial inclusion will likely require a “bricks-and-clicks” distribution model, including physical branch presences to build trust and confidence, perhaps supplemented by agents (such as post offices and supermarkets). This may take a nontraditional form, such as Bank Rakyat’s floating bank branches allow inhabitants of Indonesia’s remote islands to access financial services. The bank has even gone so far as to launch its own satellite, BRIsat, to provide reliable connectivity and reduce operating costs.

Technology is also allowing financial institutions to overcome the lack of credit histories in many of these emerging markets. Many financially excluded individuals don’t have the financial track record that banks traditionally rely on to support lending decisions, nor do they necessarily have formal proof of identification.

Pioneers in this space are developing new underwriting and credit scoring analytics for individuals and businesses to assess

lending risk. In Mexico, the lending platform Konfio measures creditworthiness of potential business clients through a proprietary algorithm. By looking at cash flow and willingness to repay through analyzing the online application, social data, e-commerce platforms, and other data sources, they are able to create a credit rating for business that would be previously be turned away. In China, the agriculture fintech company Nongfenqi does the same through conversations with customers’ business partners, customers, and fellow villagers. These new ways to calculate risk save financial institutions money while allowing them to expand their customer base significantly.

There has never been a better time for banks to seek revenue growth through financial inclusion, as the room for growth is broad. Banks that seize the opportunity opened up by new, cheaper, technology will be well positioned to capture market share and play a lucrative and transformative role in the growth of emerging markets. EY’s FinTech Adoption Index indicated that 69% and 52% of the digitally active in China and India respectively are FinTech users.

These new entrants have already gained significant market traction in emerging markets from their ability to tap into tech-literate but financially underserved populations. Incumbent banks that don’t start targeting this customer segment will find the FinTechs and digital disruptors swiftly stepping up and owning the space.

HUSTLE EAST AFRICA

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DIGITAL BANKING

APP

HFC Managing Director Sam Waweru, HF Group Chairman Steve Mainda and HF Group MD Frank Ireri Officially launch the HF Whizz Digital Banking Solution.

HF Group’s Digital Transformation Takes Shape

“

Good is the enemy of great. And that’s one of the key reasons why we have so little that becomes great.”-James C. Collins Locally and regionally, HF Group has made a name as one of the largest integrated financial service providers.

From mortgage, real estate development to banking and insurance, the diversified group continues to positively impact the lives of millions of Kenyans every day

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through its subsidiary companies. Since inception in 1965, the firm has grown to become the leading provider of integrated solutions for the acquisition, development and improvement of property in Kenya.

Over the years, HF Group’s star has shone brightly. The group has completed multi billion shilling projects. It’s these projects that have propelled it to the market leadership position that it holds.

Despite the milestones, the firm is now

raring to move from good to great. And one of its key strategies to achieving this is through a digital transformation strategy that started in earnest in 2016 when it introduced a core banking system.

The digital transformation journey seems to have gathered momentum as the firm introduces HF Whizz, a mobile application that gives customers a new banking experience. It allows them to access and control their finances from anywhere, at anytime.

With the HF Whizz App, you can manage your account, deposit money into your account, transfer cash, pay bills, track your experience, buy airtime and do so much more on the go.

The HF Whizz app marks the group’s entry into the mobile lending segment, a rapidly growing and competitive industry.

It’s launch carries great significance to the financial institution as it will accelerate

the group’s digital strategy.

The app was recently unveiled by HFC, the banking subsidiary of HF Group, in a colorful event.

According to HFC Managing Director, Sam Waweru, the digital product brings together years of research and development and an expansive partner network.

“It marks the advancement of the group’s strategic focus on digital banking,” he says.

The HF Whizz app seeks to deliver frictionless digital experience to HF customers. It also seeks to offer comprehensive business functionality and to drive the group’s profitability.

With a mobile phone penetration of 90% in Kenya, and transactions of over Sh1.22 trillion in Q22017,HF Group sees opportunity in the digital space, the reason it’s angling for a piece of the pie. With HF Whizz, it has declared its interest to be at the forefront of provision of next generation financial services. Having invested heavily in innovation, the firm is keen to offer solutions that are convenient and easy to use.

“With HF Whizz, we are delivering value to our customers even as we show the technological benefits to our shareholders.”

So, will HF Whizz be a roaring success? What does it mean to the financial services group?

According to HF chief information officer George Njuguna, HF Whizz is a technology whose time has come.

“We asked, how do we transform a company that has been so good to one that’s great in the digital space. The answer was HF whizz.”

To make the app a roaring success, Mr. Njuguna says the firm intends to change its way of doing business. First, he says, there’s need to change the organization’s culture and strategy to focus on digital transformation. “There’s a lot of work going on about culture change and strategy and people are starting to see the small wins,” he says.

Although the digital product was launched in July, the company has spent two years on research and development.

HFC sees the product becoming a key business unit for the entire group.

“We have a big vision of making this a Sh2 billion business in two years. We hope to impact one million customers .”

Like any other transformative project, a digital transformation has its own kind of challenges. Njuguna says the first challenge that the company had to deal with was inadequate funds.

“The last one year was challenging for us as an organization. We had to be creative to overcome this challenge.” He adds that they also had to hire more people to carry out the technological aspect of the HF Whizz App. One thing that makes HF stand out is that it has a robust in-house IT team that designs and develops all its digital products, at a time when most other firms outsource IT solutions.

Looking at their product, you can easily tell it was designed with the modern customers in mind. It’s now available to smart phone users, with all its digital features aimed at the youthful customer, micro entrepreneurs or anyone who wishes to experience flawless digital banking.

The firm’s chief digital officer Nancy Matimu says that they already have an integrated marketing strategy in place as they intend to take the product to the mainstream.

“From billboards, to TV commercials to digital and social media, expect to see us everywhere,” she says of the firm’s go-tomarket strategy.

HFC, the creator of HF Whizz is working on a growth strategy anchored on customer recruitment, deposit mobilization and branch expansion. It aims to become a top-tier bank by 2020.

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P I H S R U E N E ENTERPR WATCH

WOMEN GROUP

SUFURIA WOMEN DEFY ODDS TO SCALE HEIGHTS OF SUCCESS Sufuria Women Group in Maili Saba, Dandora has beaten great odds to turn around lives of members

By Amos Wachira

D

eep inside Maili Saba village in Dandora, Nairobi, Jane Muthoni is tucked inside a small room where she sews seat covers and cushions.

In the same room, Miriam Waithera is decorating handbags using beads, while Vanessa Wanja is packaging bottles of homemade detergent ready for sale. A few other women are busy training young girls on hairdressing and soap making.

These are members of Sufuria Women

Decorating handbags using beads.

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Group, a pioneer group of women who dared to dream, and are now reaping rewards.

Sufuria Women Group is a self-help outfit formed soon after the launch of the Women Enterprise Fund in 2007.

The group’s Chairlady, Jane Muthoni says the idea of starting the group was mooted back in 2008 after then president Mwai Kibaki announced a fund for women to help turn around their lives.

“We formed a group of 17 members which we registered at the District Gender Office. We were keen on utilising the

Women Enterprise Fund to better our lives,” says Muthoni.

When the group kicked off its operations, members decided to be contribute a monthly amount of Sh160 which they, in turn, borrowed using a popular mode of banking known as table banking.

Table-banking is an arrangement in which members of a group meet once monthly, place their savings, loan repayments and other contributions on the table then borrow immediately either as long term or short term loans. The women use the money borrowed as capital for

their livelihood projects.

Together, the women were able to change their lives by participating in micro businesses that are now generating incomes for them and their households.

“Before forming this group, we were housewives. We struggled to bring up our children because some of us were breadwinners in our families,” explains Muthoni.

“We chose the name Sufuria (cooking pot) because it resonates well with our mandate as a group. We wanted something that could help us cook our dreams into reality while still providing a livelihood for us,” says Muthoni.

Table banking Soon after perfecting their table banking model and stabilising the group, the women embarked on scaling the activities of the group to provide more jobs, and ensure increased income to members.

Their first loan of Sh50, 000 from the Women Enterprise Fund was used to buy sewing machines.

“We also bought clothing materials, which we transformed into lovely seat covers for sale. Soon, every woman in the group had something to do. If they could not sew or decorate, they took the finished products to the market,” says Muthoni.

Before long, the group’s fortunes started to grow exponentially. “The orders were coming in their hundreds. We soon found ourselves overwhelmed and decided to borrow more funds from WEF to help us meet the huge demand for seat covers,” says Muthoni.

WEF granted them a second loan of Sh 100, 000. With this money, the group bought another sewing machine and diversified into bead-making and making decorations.

The group sponsored five of their members to attend bakery training. The members then trained others and they all started knitting beads on handbags.

The handbags and seat covers were sold by members to customers residing around Maili Saba.

With time, their beaded handbags became a hit, prompting Sufuria Women to distribute them to customers spread across the country.

“We always attend trade fairs and exhibitions where we get massive orders for our commodities,” says a beaming Muthoni, locally known as Mama Kimani.

Train on soap making Sufuria Women Group has since diversified its portfolio to include soap-making.

They were recently trained on soap and detergent making and have gone on to make this idea profitable. Now, they supply local schools with liquid homemade soap and detergent, making a tidy sum in the process.

Looking back, the Group can only thank the WEF for aiding them in their efforts to transform lives around Maili Saba. Going by their various businesses, they make a tidy sum of money every month. This has enabled them to repay the loans on time.

Around Maili Saba, poverty is a harsh reality that dozens of families have struggled to overcome for long. The girl child’s struggles are evident. Many school going girls drop out after getting pregnant and end up in poverty after resorting to illicit brews.

The women, themselves having being thrust into the task of being young breadwinners, have experienced the struggles first hand. It therefore comes as no surprise that they have never relented in their quest to find a better life. Since forming the group they have seen their fortunes rise.

“Before joining the group, I was jobless and struggling to pay fees for my children,” says Miriam Waithera, a member of the group. ”Now I get soft loans from the group to pay school fees for all my three children, even the one in high school.”

Changing lives Another member, Vanessa Wanja, says she is happy that she has utilised her skills in hairdressing to teach young girls the skills, for free.

“I have grown my salon business since joining this group. Before then, I could not afford to stock the salon, or buy some equipment, but now I can,” says Wanja.

The group has blazed a success trail for numerous other groups in the country, going by their success story which continues to be told ridge after ridge in the impoverished neighbourhoods of silanga and Maili Saba.

This is the reason the Sufuria women set out to not only change their livelihoods but those of society. To save the marginalised girl-child in Maili Saba, the group, despite its humble beginnings, did what most other established organisations have failed to do.

They bought a hairdressing machine and used it to train young girls who become mothers prematurely, a skill that can turn around their lives. So far, more than 20 girls have acquired skills in hairdressing and are currently working in various salons to support their families.

The group also employs these unfortunate girls to help in weaving, tailoring or soap making, giving them a fresh lease of life and an opportunity to fend for their families.

For a day, the girls are able to sew together at least two bags, thereby earning a wage of Sh400. ”It is a way of giving back to society,” admits the group’s chairlady.

For their efforts, the group has toured most parts of the country, selling their wares and inspiring other women.

In 2015, they visited Rwanda in their bid to gain more ideas that can help them improve their livelihoods.

“We mostly sell our products through referrals. We send them to as far as Mombasa and Western Kenya,” says Muthoni.

The group meets every Friday afternoon to assign duties and plan for the following week.

The group sims to secure a loan of Sh350, 000 from the Women Enterprise Fund. With their growth trajectory in place, they can bet on a bright future.

“We are looking at opening a cyber café to help youth get skills in Information Communication Technology (ICT),” says Muthoni.

The group also seeks to buy a plot to build their own office. At the moment, the ‘Sufuria’ women pay a monthly rent of Sh 4000 for their workshop.

Sufuria Women exemplify a success story of a people who have taken advantage of government funding to better their lives. They urge other women to utilise the accessible and affordable loan products from Women Enterprise Fund to start or expand their business for wealth and employment creation.

HUSTLE EAST AFRICA

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WOMEN GROUP

WOMEN GROUP SETS OUT TO TRANSFORM MEMBERS LIVES Rugita Women Group in Gikomba is rated among the best in repayment of loans under the Women Enterprise Fund. The group now eyes the lucrative real estate sector to further grow members’ wealth Second hand clothes.

By Jeff Korir

I

n Gikomba, members of the Rugita women Group are easy to find. The second-hands clothes dealers are well known in the expansive market.

Other than their businesses, they have put together one of the best organised women groups in the country.

Rugita, a name derived from the words Ruai, Githunguri and Utawala, where most of the members come from, was formed in 2005 as a way of uniting the enterprising secondhand clothes dealers of Gikomba.

Other than uniting the members, the group set out to engage in economic activities that could generate extra income as a way of boosting their fortunes.

After registering as a self-help group, Rugita started off by meeting every month

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where they could contribute money for a merry-go-round.

Merry-go-rounds are rotating savings and credit models in which members agree to contribute a fixed amount at each meeting for a fixed period such as one year. At each meeting the funds are collected and certain members are paid the entire collected sum on a rotating schedule.

After operating through the table banking model for five years, the eighteen women decided to boost their income and approached the Women Enterprise Fund for a loan. They wanted to invest in the booming real estate sector.

“We realized we could do more. After five years, we were convinced that we could trust each other as members and decided to go for a loan,” says Mrs. Lydia Anyona Alfayo, the chairlady. With the

money, they reasoned, they could buy plots for each member and help build their own houses.

“Women Enterprise Fund gave us loans which we lent to members at an interest,” says Mrs. Alfayo.

With time, the interest from members’ soft loans accumulated. The women used this money to help each other buy household goods.

“We saw that this was not helping us as a group. We wanted something that could transform our lives. That is how we settled for plots,” explains the chairlady.

The Women Enterprise Fund provides accessible and affordable credit to support women start or expand their businesses.

How the fund works There are two ways of accessing the

fund. One is through Financial Intermediary Partners, individuals or registered groups or companies owned by women may approach any of the fund’s financial partners who will conduct their normal credit evaluation.

The second method is through the Constituency Women Enterprise Scheme, a channel which funds registered groups.

The application forms are available free from the offices of the District Gender & Social Development Officers (DG&SDOs) countrywide.

On the marketing front, the Fund has continued to promote local and international marketing of goods and services produced by women entrepreneurs. So far, the fund has been able to extend loans amounting to Sh 2.6billion to over 645,825 women entrepreneurs such as Rugita. By the same token, the Fund has trained 116,372 women in loan management and business skills to date.

WEF’s business support services include capacity building, facilitation of decent work spaces such as markets and linkages with larger companies.

Rugita Women Group’s first loan was Sh 50,000 which they ploughed into the group. They grew the money through interest from members who borrowed the funds and the group was able to repay the loan promptly.

Mrs. Alfayo says: “The Women Enterprise Fund officers told us to repay per month and we were therefore able to settle our balance fast.”

The group would later get loan amounts of Sh 100 000, Kshs200, 000, Kshs300000, Kshs400000 and the latest is Sh 500,000 which they are repaying.

All the loans were directed to purchase of plots in the fast-growing area of Ruai along Kangundo Road and along the Eastern By-pass.

The group has managed to buy six 50 by 100 plots and a one acre plot in Joska, Ruai. To ensure that every member gets her share of the land, the group is planning to accumulate land parcels in the area before subdividing it to members.

What sets Rugita group aside from thousands of women groups in the country is their dedication to repaying loans.

So far, they have managed to repay all their loans before time, a feat that has ensured that they are among the leading women groups in the country and, therefore, a success story, according to Women

Enterprise Fund.

“They told us we are the best as we are very well organised and always repay on time,” says Mrs. Anyona.

The group pays its loans through mobile money transfer services.

Value added services Rugita members say Women Enterprise Fund officers are warm and pleasant, thus making the women’s experience ‘exciting.’

“We usually visit the Fund’s offices where we receive advice before the loan is disbursed. They also make the process simple as long as you meet their qualifications for a loan.”

Tellingly, their relationship with the Fund has borne fruits. Their lives have been transformed a great deal, they say, adding that they now feel empowered.

“We have been able to build own houses and to take our children to school. That is what matters to us,” says Mrs Alfayo.

Other than this, the group is making inroads into the real estate sector. If all goes as planned, the women will soon be developing their plots with a view of reaping from the booming sector.

The group chairlady says they are planning to build apartment blocks in Ruai, if they get their next loan of Sh 1 million from the Women Enterprise Fund.

For their successful journey, the group has been able to mentor tens of other women groups in the country who have come to learn ‘the best practices in

women group management.’

Mrs. Anyona says most groups fail because they lack the trust that binds them together.

“Some are greedy. They do not want to repay the loans. They go ahead and consume the loans thinking that it was a grant,” she says.

She cites one group that is said to have acquired a loan in 2007, but has since failed to repay. “For us, we are very disciplined with the way we handle the loans. They must be used for the intended purpose.”

So far, the group is heavily involved in creation of other success stories.

“We take up a few members who we take through all the processes of group formation. After mentoring them, we release them to be on their own,” explains Mrs. Alfayo. Already, two groups have benefited from this noble move.

One of them, i-Vision, has since been granted a loan by the Fund, with its members already realising change in their lives.

As it stands, Rugita women are daring to dream. They have been empowered massively by the Women Enterprise Fund and might soon become the most successful women group in the country.

“We thank the Women Enterprise Fund for showing us that it is possible for women to succeed,” concludes a cheerful Mrs. Anyona.

HUSTLE EAST AFRICA

17

JUA KALI

FORMER HERDSBOY BUILDS THRIVING COOKING STOVE ENTERPRISE Erastus Mutinda proves that “what the mind can conceive can achieve”

By Hustle Correspondent

W

hen Erastus Mutinda completed his primary school studies in 1992, it dawned on him that his father could not afford to pay fees for his secondary education.

Considering that he had passed well enough to get letters of admission from three schools in Makueni County where he hails from, this came as a humiliating experience for the 15 year old. His father helped him get a job as a herdsboy in Uthiuni, Mbooni where he earned a meagre monthly pay of Sh150.

While herding, Mutinda remembered that his skills as a bricklayer and devised a way of exploiting his skill. As a class six student, he had built his own brick house in the homestead, which was quickly demolished by his father.

Later, he would make history after he made the first known brick sofa set in the area.

“I used to walk around with local masons. Before long, I was making brick houses for people.”

However, his transition from a herdsboy to a bricklayer was not a walk in the park. “I injured one of the cows under my care to compel my employers to fire me so I could do something that I liked,” he recalls.

Mutinda recalls how life turned from bad to worse. What followed was a desperate attempt to move to the city of Nairobi in search of better opportunities.

“Landing in Nairobi’s Machakos Country Bus Station in that cold evening in 1994, I realised that I had nowhere to sleep. It was by the grace of God that I bumped into a friend from my village who took me in.”

But his relief was short-lived. After a few days, he was thrown out of the house

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cooking stoves (jikos).

and told to fend for himself.

Suddenly, he was out in the streets.

Frustrated and hopeless, he went back

to his rural village where he could not even get the lowly manual jobs as villagers no longer trusted him.

Abject poverty After a dehumanising life of poverty and deprivation, the turn of the century brought good tidings to Mutinda, who comes from as large family of ten.

Armed with Sh60, he started making home banks in the impoverished slums of Mathare in 2000. Mutinda bought tins worth Sh35 and made 40 home banks in the first day. To his surprise, he sold all of them and earned Sh400 from the day’s sales. To get buyers, he would traverse the length of the sprawling slums. While in his daily ventures, he came across a shed that was making cooking stoves (jikos). He became cusrious.

“I knew I could make jikos, employ a few more people and make bigger profits.”

With the savings of Sh18 000 accumulated over a year, he bought tools and raw materials to enable him delve into the lucrative jiko-making business.

Players in the Jua Kali sector learn business survival tactics the hard way. With little initial capital and having to adjust to a hostile environment, they become hardened fast. Many risks are taken, losses absorbed and lessons learnt the hard way.

The determined and skilled ones survive, making progress to transform their businesses and lives. Mutinda passed through this refining experience.

He taught himself how to make jikos and within a year, he was an expert who could transform tins into any kind of cooking stove that clients wanted.

One stop Jua Kali shed Before long, his business had transformed into a one -stop Jua Kali shop where all kinds of items, from metallic basins to boxes, were made.

“In 2004 and 2005, I recorded booming business. I moved from Mathare to Huruma where I could get more customers and at a permanent structure,” says he.

His fortunes would rise astronomically in the next two years before the worst happened.

The post-election violence that gripped the country in 2008 dealt a devastating blow to his thriving enterprise. Business structures in Huruma Corner, where he operated from, were being razed down by fighting factions of political supporters.

While entire businesses were being wiped

out, he was lucky that his Jua Kali business remained unscathed, but the effects of the violence would finally catch up with him.

“Customers fled. We were not making any sales. I depleted my savings and was contemplating closing down altogether. I could no longer sustain the business,” he muses.

It was at this opportune moment that a struggling Mutinda would meet a marketer from a local microfinance bank who encouraged him to cultivate a culture of savings so as to gain from financial products by banks and microfinance institutions.

He says: “At first I was very skeptical.

They told us to make deposits with them first and personally, I was not used to saving my money with banks, so I suspected that I would lose my hard earned cash.”

Uplifting small businesses However, after being convinced that the micro lender was out to uplift small businesses in the area, Mutinda invited five of his friends to form a group that would allow them to save money and borrow from the micro-finance bank.

“We religiously saved for six weeks and then appointed two people to borrow money to test if the bank’s promises were true. We were not disappointed as

by the end of the first week, the duo had received money in their mobile phone accounts,” says Mutinda, his face lighting up.

“The best thing about microfinance is that they had financial experts who advised us to use the money to boost our businesses. I was the third person to borrow from the micro lender,” he adds.

Since then, Mutinda’s business turned into a success story. He would borrow money and repay promptly.

“My business grew in leaps and bounds.

I now employ three permanent artisans to make jikos, besides tens of other contractors who are paid daily,” says the father of two.

He attributes his growth as a businessman to the cordial relationship with a micro lender, which has turned out to be a reliable partner.

Currently, he has an expanded business which includes three mobile banking agencies, (two for MPesa and one for the microfinance bank), a printing and photocopy booth and a mobile phones accessories shop.

On a good day, he makes an average of 30 jikos which he sells at between Sh200 and Sh1200 to clients who come from far and wide. His jikos are known for their quality and this has helped him establish trust with his customers who refer others to his yard.

At the social level, Mutinda says micro finance enabled him buy a shamba in his rural home where he has built a permanent house for his family.

“I have also been able to take my two children to good boarding schools, which I could not afford,” he offers with a smile.

Going forward, Mutinda is optimistic that his thriving partnership with the micro lender will allow him buy a vehicle that will ease his transport woes. “I would like to go to far away places to distribute my jikos. This way, I will create more jobs as I scale up my business.”

He advises the youth to embrace the Jua kali sector and to put God first in whatever they do.

“I recall back in primary school, one of my teachers told me that failure in education is not failure in life. I have lived with that maxim and I have found this to be true. Now I can look back and say I have reaped the fruits of my hard work and determination,” he concludes.

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19

MUSIC

Turning a hobby into a thriving business As a university student, learning to play the guitar excited Joseph Kamata so much that he set out to help others learn this skill

Joseph Kamata, founder, Kamata school.

By Hustle Correspondent

F

ew people have the ability to turn a hobby into a money making business. Fewer still would have the passion to encourage hundreds others to learn a new skill.

Joseph Kamata not only turned his passion of playing the guitar into a business, but also created an opportunity for thousands others to learn how to play musical instruments. This came at a time when few schools were offering such courses.

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He is the brains behind Kamata School, which he started in 2010 to create an environment for people to learn music and expand their creativity.

As a fourth year student at the University of Nairobi in 2009, Kamata had a burning desire to learn how to play the guitar. He enrolled for classes and by the end of that year he not only had the skills but also mooted an idea to extend what he had learnt to others.

This culminated in the birth of Kamata School, a leading institution of music and

entertainment which now draws students from across the East Africa region.

Favourite of the youth Located in Nairobi’s Central Business District, Kamata School exemplifies what sheer passion, combined with enterprise, can achieve. Kamata describes himself as a “simple man on a journey to becoming extraordinary”.

But he is no ordinary entrepreneur.

From just an idea, he has grown the music school to be a respected player in the entertainment industry. Already, most professionals playing the piano and guitar in the local and regional entertainment scene have gone through Kamata School.

A spot-check on the school’s online portal reveals the massive demand for these courses, which are shunned by major learning institutions. Guitar and piano skills were once considered a preserve of the rich but have most recently come to be a favourite for young people who have gone ahead to establish thriving careers out in the process.

Five years later, what started as a simple music training unit has grown to be a huge music institution, complete with a dance school, Disc Jockey (DJ) academy and a vocal coaching unit.

Besides, there are photography and videography classes that cater for hundreds of students with a desire to sharpen their skills and develop careers in these areas.

How this entrepreneur has managed to simplify the process of learning to play the various instruments is simply amazing.

“Our institution is committed to ensure you receive high standards training by qualified and experienced instructors. Our programmes are uniquely structured and thoroughly researched to deliver the best of musical training.”

By engaging professionals and continually getting feedback from clients, Kamata is able to note areas that need improvement. This has had a positive impact on the business as he gets a steady stream of referrals from satisfied clients.

His enterprise has now expanded to Westlands in Nairobi and Meru town, underpinning the growing demand for such courses throughout the country. Additionally, the young entrepreneur recently added a new feather to his hat through Kamata Capital, a financial vehicle.

How did he start?

“I was excited. My new skill in playing

Students attending a lesson. the guitar filled me with so much excitement and fulfillment and I felt everyone needed to get this feeling. It was so good I couldn’t help but want people to share in this experience,” says he.

The young entrepreneur felt so great playing the guitar that he set out on a journey to let everybody know how awesome the skill is. “I couldn’t keep it to myself,” an enthusiastic Kamata says.

He saw an opportunity after realising that his skills and competencies could be useful to other people. “Why now start a business?” he thought. The idea had been born.

Faced with the challenge of limited capital, he committed his earnings from his insurance job to expand the company.

Soon after graduating, Kamata had worked in the insurance industry first as an accountant in one company and later in a different company as a Branch Manager. “I learned to grow the business while still in employment,” he says.

Meeting him for the first time, Kamata cuts the mien of a polished businessman.

He has put impressive efforts to see to it that his passion coalesces into a moneymaking business. ”People love our training,” he avers.

Creative skills Kamata School invests in developing creative skills. Its trainers are remarkable and much sought after, thus making the

institution a one-stop-shop for musical entertainment training, music instruments, DJ, music production and voice coaching.

There is increased competition though, with freelance music instructors and new establishments setting shop, but this does not worry the young businessman.

“We are consistent in ensuring that we deliver quality services and dedicate our time in research of new techniques and programme structures.”

Growing up, Kamata had wished to be an electrical engineer, but soon after finishing high school, it dawned on him that he could not pursue the course as he failed to achieve the required points for the engineering course.

“I settled for Economics. I was a regular student at the University of Nairobi.

In campus my music dream was born after attending ‘The Journey’ Friday night shows,” he recalls.

Today, he has raked in handsome returns from his business. Considering that this was a green area for the youngster, he says that he had to surmount a few challenges to make it but has no regrets.

Meet financial obligations “Starting a business right from scratch in an area you have no vast experience in can be challenging. I started with plenty of passion and drive,” says the CPA (K) graduate.

He says that at different points in his business, things were so tough that he

could feel he had every reason to give up and close shop.

“Cash flow is king. The biggest challenge has been navigating in times when cash flow is low. Meeting all financial obligations on time, while steering growth is challenging for starting companies.”

Asked about his experience as an entrepreneur, he affirms that he has enjoyed every bit of it. “Entrepreneurship is fulfilling with the freedom it brings,” he says, adding that being a business owner gives someone an opportunity to determine what course their lives take. “I can live where I want, do what I want go where I want. I’m responsible for my progress.

I’m in charge. This equally means a call to discipline, drive and determination,” he explains.

Kamata sees his school becoming a dominant player in the entertainment industry in the next few years.

“I do not want to compete, I want to dominate. I intend to raise the bar in all aspects and make it hard for anyone to think music school and not think Kamata School.”

He advises the youth to develop their mental skills if they want to succeed in entrepreneurship. He is married and a devout Christian.

Kamata’s diary: • Wakes up at 5am for morning devotion and reads motivational books for an hour.

• A boxing workout follows for half an hour.

• Leaves for work at 8am.

• Makes different work plans to meet the needs of his business.

• Leaves work at 7pm.

Favourite holiday destination?

Mombasa and Naivasha Favourite sport?

Boxing Favourite book?

Think and Grow Rich Napoleon Hill Best quote?

Gardone Cordone’s ‘Faith is the ‘eternal elixir’ which gives power to the impulse of thought Philosophy about life?

It’s in you. Do it good!

HUSTLE EAST AFRICA

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SPECIAL REPORT

ALTERNATIVE CURRENCY

KICKING POVERTY OUT OF KENYAN SLUMS Alternative currencies are bringing prosperity to Kenyan villages

Amoxers Wachira

P

ioneered by a community organization, a new kind of freshly minted currency in Kenya is wiping poverty out of Kenyan slums, a welcome financial lifeline for local residents.

In Nairobi’s Gatina slums, residents have found a new way of conducting business: they use community currencies to trade goods and services.

For the last two years, the traders have been using special printed vouchers to buy and sell commodities, alongside the national currency, the Kenya shilling.

Christened Gatina-pesa (Pesa means money in Kiswahili), or Sarafu-Credit, (Sarafu is Kiswahili word for currency) the new currency helps traders to sell or buy their excess goods or services while reserving the national currency which they

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save for other needs.

The currency, issued by Grassroots Economics, a not for profit organization consist colorful, security printed vouchers with denominations of 5, 10, 20 and 50 which are equal in value to the Kenya shilling of corresponding value. Unlike national currency which is issued and backed by the Central Bank, community currencies are backed by the goods and services of the issuing business network, making them decentralized and interestfree.

A large network of vendors, craftspeople and schools back the currency, enabling trade to occur between people who lack enough national currency to spend. Sarafu-Credit is a local means of exchange that does not replace the national currency but rather supplements it, according to Will Ruddick, a development specialist who founded Grassroots

Economics.

“Community currencies enable the community to fully utilize its existing productive resources, especially unemployed labor, which has a catalytic effect on the rest of the local economy, “he shares.

The result is an increase in trade within the community, consequently leading to more savings and job creation.

In an area that lacks most basic facilities and infrastructure, this comes as a muchneeded financial cushion for residents.

The voucher is a zero interest loan which is available to people who do not have access to credit. A 2015 report by Financial Sector Deepening shows that an estimated 4.7 million adult Kenyans (25% of the adult population) live without access to formal financial services and some 39% of the low-income populations cite cost as a constraint to saving. This rings true in most informal settlements,

where economic stagnation is real. Most households in slums lack access to credit as they cannot raise the collateral needed by banks, creating a gap which is filled by the ‘credit vouchers,’ says Ruddick.

Here is how community currency works: A not for profit Organisation like Grassroots Economics looks for existing small and micro entrepreneurs who work and trade together and encourages them to start a community based organization, or a business network of 100 to 200 people. Each entrepreneur is audited and endorsed by other businesses to be allocated community currency. A new member is issued with 400 SarafuCredit which they can use in exchange for various goods and services. Community currency serves as a promissory note for members’ goods or services and can be used to account for barter exchanges among network members.

In the sprawling informal settlement, biting poverty keeps most children out of schools as their parents cannot afford tuition fees. But this is quickly changing. With a few schools here accepting community currency, more parents are able to supplement what they have with community currency thus keeping their children in schools, according to Francis Wanjala, a headmaster of a local school in Gatina, who is also the special Programs Coordinator for Grassroots Economics.”If the school fees is $3 (Kshs300) for instance, a parent who is struggling to raise the amount is allowed to pay $2 (Kshs200) in national currency while she tops up the balance using community currency,” explains Wanjala.

With increased trade and improved savings within communities, dreams of prosperity which could be seen as farfetched a few years ago are slowly turning into reality. For Esther Wanjiru, a local trader whose business accepts community currency, saving for a better life is now easier. She says that her business has also recorded increased sales since she started using Sarafu-Credit last year, leading to more savings which she uses to improve her home. She represents a growing list of traders who have seen their lives change since the currency was introduced in their area. “When times are hard and we cannot afford a commodity due to scarce national currency, we use community currency to top up the difference,” she adds.

Dr. Radha Upadhyaya, a lecturer at the Institute for Development Studies, University of Nairobi says that community currencies can be thought of as a voucher that helps people exchange goods and services in poor income areas where there is little currency circulating by the middle of the month. “It is quite a low cost way of reducing poverty,” she adds.

Other than this, communities using community currencies report “a greater sense of pride, economic security and community cohesion,” according to Ruth Mwangi, program director at Grassroots Economics.

To improve the living standards of the communities, a currency-issuing business network collects a portion of the credits as tax which is used to fund public service projects like trash collection and road maintenance.

However, the amount of community currency in circulation must be regulated.

Ruddick explains: “Since the currency is akin to a loan without monetary collateral it is important that not too much is issued, (but rather that it circulates rapidly).”

Ruddick realized that most people in low-income communities often have goods and services to trade, but lack money which they can use to purchase wares from each other. The currencies allow people in these villages to exchange

goods and services without relying on scarce traditional money.

He is not new to the printing of complementary currencies in Kenya. In his bid to bring prosperity to poverty stricken communities, he started piloting community currencies five years ago in Mombasa and Nairobi. This culminated in the launch of the first complementary currency, BanglaPesa in Mombasa in 2013.

The notes were printed on specialty paper, complete with serial numbers and ultraviolet ink that makes it hard to counterfeit. The notes were issued free of charge to the first batch of 200 businesses. After a month of trading, the BanglaPesa program was billed successful.

Ruddick says that there was 22 per cent increase in trade within the community.

The program’s success prompted Grassroots Economics to introduce four similar currencies namely Ng’ombeni-Pesa in Kwa Ng’ombe( Mombasa), Gatina-Pesa in Kawangware, Lindi-Pesa in Kibera and Kangemi-Pesa in Kangemi, Nairobi.

So far, Grassroots Economics has issued roughly 40,000 Kenyan Shillings worth of Community currency in each community, totaling to approximately Kshs200, 000 in circulation in Kenya.

However, this success came at a steep price. At one point after launching the first community currency, Ruddick and his HUSTLE EAST AFRICA

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team were arrested over allegations that the currency was funding a secessionist group in Mombasa, followed by claims of forgery from Central Bank of Kenya.

But on August 23rd, 2013, Director of Public Prosecutions deemed the programs legal and compliant with all laws including CBK Act. “The reason is, we are not trying to create a separate currency, but rather give people access to credit in the form of rotating vouchers,” says Ruddick.

But experts warn that these currencies also limit economic activities. Dr. Upadhyaya says that use of community currencies prevent participants from getting goods and services from outside the local economy, translating to small exchange networks. Ruddick says the networks (which continue to grow with time) boost trade by creating a local credit reserve where at least 10 percent of local consumption is locally produced and trade facilitated by community currency.

“The use of community currency actually improves the local economies, even in Kenyan Shilling sales,” says Ruddick.

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The currencies have continued to create an impact on communities in Kenya and beyond. Through a partnership with Cape University, Ruddick and his team have introduced two community currencies in South Africa. So far, plans are underway to roll out the currencies in more villages across East Africa including Rwanda, Uganda and Tanzania. “What some Kenyans perhaps don’t understand is that any group in Kenya can create a mutual-credit exchange to assist in trade, savings, and loans,” shares Ruddick.

This form of currency is not the only one to run into trouble with the regulator.

In December last year, the launch of Bitcoin, a decentralized virtual currency ran into headwinds in Kenya. CBK, through a statement, warned Kenyans against buying or selling the virtual currency claiming that ‘bitcoin transactions are largely untraceable and anonymous making them susceptible to abuse.’

According to Elizabeth Rossiello, the managing director of BitPesa, a local start-up that trades bitcoins in Kenya, virtual currencies are not illegal in Kenya.

However, she says, the market is still emerging, although with myriad challenges. These include ignorance amongst Kenyans, failure by the government to accept such currencies and lack of financial partnerships with major monetary players like banks. “But this is a technology whose time has come and is unstoppable.”

Former Bitpesa marketing manager Martin Likoko says that Bitcoin is a new technology whose adoption might take time, but is poised to disrupt the financial sector in coming years.

Seen as an ideal tool of alleviating poverty, community currencies are gaining popularity in a variety of local communities across the world, from Europe, Africa to the U.S.A. Will Ruddick says that alternative currencies threaten to bring into light what has long been swept under the rug in terms of why monetary policies have increased inequality.

“I see this potential awakening as a very good thing for the health of society and more stable economies,” he says.

MOBILE GAMING

Kenya’s gambling problem Mobile gaming, online casinos have triggered the success of the $ 30M gambling industry, but addiction to gambling could be a costly drawback Amoxers Wachira

F

or two years now, sports’ betting has been part of Kevin Mwangi’s life. The university student uses his spare time, mostly weekends, to place bets worth 1 dollar, as he tries his chances of winning cash prizes.

All he needs is a mobile phone, which he uses to predict the results of a variety of games such as soccer and motor racing, some taking place in different continents. His biggest prize so far stands at Kshs55000 that he won after getting one of his bets right. Like him, thousands of other Kenyans are slowly warming up to mobile gaming, a growing trend that has seen the number of online and mobile gaming sites rise exponentially over the past two years.

Some of these sports betting sites have whetted the appetite of gamers by introducing jackpots. Recently, a young mother of two children won Kshs22 million jackpot prize, one of the largest in Kenya. Elsewhere in the suburbs of Nairobi, small gaming slot machines are gaining popularity in both residential and commercial centers,

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with locals having a chance of playing for as little as Kshs10. The growing appetite for gamers like Mr. Mwangi has spurred growth of the local gambling industry; a trend that Mr. David Moshi, the chairman of the Association of Gaming Operators, says will change many lives. To the new crop of gamers, it means business to predict the outcome of a match.

The statistics paint the picture of an industry on the rise. The gross gambling revenue is estimated to be in excess of $30 Million (Kshs 3 Billion) which is expected to grow to about $50 Million (Kshs 5 Billion) in 2017, according to a 2015 report on gambling by industry regu-

lator Betting Control and Licensing Board (BCLB).

The data shows that Kenya has about 43 licensed casinos with a gross annual revenue turnover of $18 Million (Kshs 1.8 Billion). While Casinos are the predominant form of gambling in South Africa and Nigeria, the new trend of online and mobile betting is quickly redefining the industry in Kenya.

With about 28 licensed operators holding bookmakers or sports betting licenses, most of who own sports betting shops, Kenya is quickly catching up with its peers in Africa. Currently, about eight operators use the online or SMS platforms for sports betting. This segment has grown tremendously since 2013 when the first online sport betting operator was launched.

Kenya’s gambling industry’s rise is in tandem with that of other African countries like Nigeria and South Africa, whose gambling revenues continue to surge despite challenging and weakening economies.

A 2015 report on gambling entitled ‘Taking the odds: Gambling outlook for 2015 - 2019 (South Africa – Nigeria – Kenya) that was released

by auditing firm PricewaterhouseCoopers (PwC) shows that gross gambling revenues in South Africa posted their second-largest annual increase over the past five years, with casinos taking the largest share of this growth by rising 4.5% over the prior year. Of the three countries included in the analysis, South Africa has the largest overall gambling market.

In South Africa, gross casino gambling revenues totaled R17.2 billion in 2014 compared with R497 million in Nigeria and R218 million in Kenya.

So prospective is the mobile and online gaming industry in Kenya that the PwC report tips it to grow tremendously in the next few years, eclipsing Casino gambling which is projected to grow at a minimal rate, rising from USD20.1 million in 2014 to USD28.9 million in 2019.

“We anticipate slower economic growth to lead to slower growth in gross casino gambling revenues in South Africa and Nigeria, while Kenya’s casinos will face increasing competition from legal online and mobile gambling,” offers Gambling Industry Leader for PwC South Africa, Pietro Calicchio.

So far, top global companies have penetrated the Kenyan gambling market while the popularity of mobile gaming sites has shot up.

Some of the leading names in Kenya are Sportpesa, Betin, Betway, Oxygen 8(Live Lotto) and mCheza. According to Kester Shimonyo, the marketing director of Sportpesa, a popular mobile and online based sports betting sites in Kenya, gaming has been overwhelmingly received in Kenya, as his firm struggles to keep up with the huge number of customers.

“There are times when the users of our website and SMS platform are too many to handle. Sometimes it is a problem on our side, but it is often with the service providers we partner with,” offers Mr. Shimonyo, adding that the firm is investing in technology to accommodate more customers. Mobile technology has singlehandedly changed the face of gambling in Kenya by bringing some of the best betting sites to the fingertips of millions on the continent, and allowing them to bet on their favorite sports teams, leagues, tournaments and players. Sports betting, lotteries, prize competitions and amusement machines like Pool tables are the main forms of gambling in Kenya. Despite the growth of gaming in the country, a few hurdles

Illegal gaming machines beign impounded by the police.. stifle progress of the gambling industry.

Considered a social vice, gambling is subject to a strict regulatory regime under BCLB which caps the number of new licencees.

Professor Musili Wambua, the chairperson of BCLB is of the opinion that licensing of gambling should not be supply driven.

“In as much as there are some positive economic impacts of gambling, its social cost must always be put into consideration and no license should be issued unless the economic impact outweigh the social cost, hence licensing of gambling has to be informed by cost benefit analysis (CBA).”

Recently, his board has been embroiled in court battles with county governments, most of which want the regulatory of gambling in the devolved government units to be under their mandate. The BCLB is of the opinion that licensing should remain in its hand as gambling is a security issue, and instructed operators to ignore licenses issued to them by counties. As a rebuttal, counties said that they would not recognize license issued by the BCLB. This matter has still not been resolved.

Heavy taxation is another bone of contention. Most gaming operators decry the heavy taxes levied on them by the government, which make it hard for them to remain in business.

Under the new constitution, the licensees are not required to contribute to good cause (charity) but BCLB has set a condition that those who give cash prizes

must contribute a certain percentage of the proceeds to charity. As at the end of December 2015 BCLB collected over Kshs 200 Million from processing permits and licenses.

BCLB’s Prof. Wambua told Hustle East Africa that “Gambling is a demerit good and as a practice worldwide; demerit goods are subject to heavy taxes or direct control and to reduce consumption because of their potential harm not only to the consumer but his or her family as well.”

This has had its toll on the industry.

With about six licensed operators holding lottery licenses, only two are active: Kenya Charity Sweepstake and Oxygen 8 (Live Lotto). The rest are dormant. The industry has objected to this provision claiming that no operator can afford to give such a percentage and still run a profitable venture.

Furthermore, government’s imposition of a 20% withholding tax on gambling winnings which was fiercely challenged by the Association of Gaming operators is also seen to slow down the industry.

There is still a long way to go for African gambling to reach tipping point.

An i-gaming insight for Africa compiled by Lorien Pilling, director of Global Betting and Gaming Consultants shows that Africa’s gambling sector fails to pull its weight by comparison with other regions of the world and accounts for less than 2% of global interactive gambling revenues, considering that the continent is home to a billion people. In the meantime, Africa’s gambling.

HUSTLE EAST AFRICA

27

MAIN STORY

RENEWABLE ENERGY

Inside Kenya’s clean energy revolution Massive solar, biogas, wind, geothermal power projects are Kenya’s answer to climate change

By Amoxers Wachira

T

o the ordinary eye, the Changoi tea factory in the green plantations of Kericho, 200 miles west of the capital Nairobi, looks like any other tea factory.

But from the lush green fields rises Kenya’s biggest photovoltaic (PV) solar project.

Launched in 2014 by Solar Century, a leading solar farm developer and UK’s most experienced contractor of ground mounted solar installations, the Changoi solar farm is a first of its kind in Kenya.

It produces 1 Megawatt peak (MWp) of electricity to run the energy-intensive tea factory.

The clean energy project could generate 1,600,000 kWh of power annually with an estimated carbon emission savings of

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HUSTLE EAST AFRICA

1200 tonnes per year. The solar Photo Voltaic system at Changoi is one of only six systems in the world using this hybrid technology which integrates solar power with both the grid and a standby generator. A similar project is rising in Nairobi, Kenya’s capital, where one of the country’s largest shopping malls, Garden City Mall, has evolved to become the largest solar carport project in Africa, producing enough electricity to power 550 urban homes every year.

This solar car park, another innovative approach to clean energy access, generates electricity that is being used by retail tenants to power facilities such as the lights and escalators in the Mall.

The two projects, together with other solar, biogas, wind, geothermal and hydroelectric power projects are Kenya’s answer to climate change and costly fossil

fuel imports.

By contrast, Kenya has some of the world’s most abundant and least exploited renewable energy sources.

According to a report by Scaling Up Renewable Energy In Low Income countries Program (SREP), Kenya has nearly7000 MW geothermal potential, enough power to meet around three times the country’s annual energy use. Yet, only over 347 megawatts of these are exploited.

Interestingly, conservative estimates show that solar energy, though widely popular, is the least exploited, partly due to expensive cost of equipment.

The need for electricity is undeniable.

Only 23 per cent of Kenyans are connected to the grid, World Bank figures show.

This translates to about 4 million out of the 43 million population leaving millions of Kenyans grappling in darkness. Take

the case of Nelly Kinyanjui for instance.

She has lived in darkness all her life.

In the mountainous village in Central Kenya where she hails from, she and her peasant neighbours have used firewood to cook, and kerosene to light up their homes. But there is hope. A new wind power plant, estimated to cost the government millions of dollars, is coming up, not far away from their village.

The Kenyan government, keen on bridging the gap, has embarked on exploiting renewable energy sources other than hydro power, which has been heavily affected by erratic weather patterns.

These include solar and wind energy.

To start with, the government launched an ambitious plan to light up all primary schools in the country. So far, the progress can be felt far and wide as more than 5000 schools, as of last year, had been electrified through the national grid and an additional 2460 schools through solar at a cost of Kshs11 billion and Kshs4 billion respectively.

Enthusiastic entrepreneurs have taken the cue from the government. They are currently lighting up large swathes of the country through low cost solar micro grids.

One of these is M-kopa Solar which provides “pay-as-you-go” renewable energy for off-grid households in Kenya, Uganda and Tanzania.

M-Kopa Solar provides power to more than 140,000 households in East Africa for $0.45 per day, and is adding more than 4,000 homes each week. The com-

pany’s customers make an initial deposit, roughly $30, toward a solar panel, a few ceiling lights, and charging outlets for cell phones, a system that would cost about $200. Then they pay the balance owed in installments through a widely used mobile banking service. The solar units are cheaper and cleaner than kerosene, the typical lighting source.

Solar is a massive opportunity for entrepreneurs and investors alike, Jesse Moore, managing director at M-Kopa Solar, says.

Another company has also imported more than 40 battery powered motorbikes for hire in Kenya’s rural areas.

Charles Ogingo’s Pfoofy Power project’s idea is based on recharging of batteries at any electricity point, but reducing costs of the same through solar-powered charging stations. Creative, bottom-up solutions like these are emerging across Kenya.

Perhaps it’s these simple but efficient interventions that have made the Kenyan government, through its sole power provider, Kenya Power to consider adding more alternative power to the grid to supplement hydropower, which has been heavily affected by erratic rain patterns.

A good example of these projects is The Lake Turkana Wind Power project (LTWP) which is poised to provide 300 MW of clean power to Kenya’s electricity grid by taking advantage of a unique wind resource in Northwest Kenya near Lake Turkana.

Using the latest wind turbine technol-

ogy LTWP will upon commissioning in mid-2016 provide reliable and continuous clean power to satisfy up to 17% of Kenya’s total installed power. Additionally, Kenya plans to set up its a first nuclear power plant with a capacity of 1000 MW by 2025, according to the Kenya Nuclear Electricity Board (KNEB), with ambitions to boost that to 4000 MW by 2033, and to make nuclear electricity a key component of the country’s energy production.

Currently, the developed world is keen on tapping clean energy, with some countries like the United Kingdom aspiring to generate 15 per cent of its energy from renewable sources by 2020. With a record $10 billion in investment in 2012 and 2013, South Africa is the region’s clear leader for clean energy development.

Nigeria is second only to South Africa in terms of installed power systems at 10.2 gigawatts. Kenya is raring to fight with the giants in this space. Kenya power is doing this through Public Private Partnerships.

Recently, the government started buying clean energy from various institutions to supplement its generating capacity. One of these is Strathmore University, which signed a deal that would see it sell 0.25 MW of solar power to the grid, in a one of a kind partnership. So far, the government is buying more alternative energy from three more suppliers, further boosting electricity access.

The Climatoscope New Energy Finance report indicates that over the next two years, Kenya is set to install 1.4 gigawatts of power.

HUSTLE EAST AFRICA

29

INFOGRAPHIC

Energy Revolution Electric car An electric car is a plug-in electric automobile that is propelled by one or more electric motors, using energy typically stored in rechargeable batteries.

Wind power

HYDROPOWER

Wind power is the use of air ow through wind turbines to provide the mechanical power to turn electric generators.

power derived from the energy of falling water or fast running water, which may be harnessed for useful purposes. Since ancient times, hydropower from many kinds of watermills has been used as a renewable energy source

SOLAR SYSTEMS The most common application of solar panels is solar water heating systems.

The price of solar power has continued to fall so that in many countries it is cheaper than ordinary fossil fuel electricity from the electricity grid, a phenomenon known as grid parity.

OTHERS

BIOFUEL

A biofuel is a fuel that is produced through contemporary biological processes, such as agriculture and anaerobic digestion, rather than a fuel produced by geological processes such as those involved in the formation of fossil fuels, such as coal and petroleum, from prehistoric biological matter.

GEOTHERMAL Geothermal energy is thermal energy generated and stored in the Earth. Thermal energy is the energy that determines the temperature of matter.

BIOGAS Biogas typically refers to a mixture of dierent gases produced by the breakdown of organic matter in the absence of oxygen. Biogas can be produced from raw materials such as agricultural waste, manure, municipal waste, plant material, sewage, green waste or food waste

30

HUSTLE EAST AFRICA

CONFERENCE

4th Green Growth Conference The role of MSMEs in the stimulation and implementation of green growth development agenda in agriculture, transport, manufacturing and energy

Strategic Commitments in Green Energy and Transport Sector 1. Put forward measures to build efficiencies and green energy source We should exploit existing opportunities such as the SGRs, boda boda and the matatus and put forward measures to build efficiencies and green energy source to fuel transport mechanisms. For instance, push for an agenda to electrify the Standard Gauge Railway, and introduction of electric motorbikes because the boda bodas (motorcycle taxis) are increasing in number by the day.

2. Mainstream green thinking Mainstreaming green thinking through education curriculumn right from primary school to the universities so that Kenya’s children can be driven by green thinking as an instrument in pursuing their professions and their enterprises.

3. Involve the existing private sector in transport sector The private sector such as the Matatu Owners Association, the Matatu Workers Association, and the existing investors around transport must be involved in the sector to transform and make it clean by reaching out to them for them to appreciate greening efforts.

4. Enabling and participatory policy environment The policy environment must be enabling and participatory, right from conception to its development and therefore as the government pushes forward in finetuning even the energy policy, participatory approach should be in the fore especially in the transport sector.

5. Financing of MSMEs MSMEs and innovators in green energy should be financed because interventions are all energy and capital intensive, and that there are lean opportunities to ac-

cess affordable and reliable funding.

6. Transition to hybrid vehicles As a country, we need to deliberate in promoting hybrid vehicles so that we reduce emissions from fossil fuel.

7. Greening of schools We need to champion for greening of schools right from curriculumn to the infrastructure or the way schools operate in terms of their energy consumption to inculcate the culture of greening our economy from the primary schools.

8. Protection of our fragile ecosystem We should protect our fragile ecosystem as we build infrastructure for transport such as highways and the bypasses and the SGR. This is because part of the green economy is protecting or conserving our natural resources. We need to look at how we balance the health of our fragile ecosystems.

HUSTLE EAST AFRICA

31

CONFERENCE

Kenya hosts the Fourth National Green Growth Conference

By MESPT

T

his is yet another opportunity for everyone keen on sustainable growth to contribute to the goal of promoting a greener Kenya.

Green growth proponents and actors will have played their part by attending the event and learning what they need to do to make a positive difference towards rallying collective action towards green initiatives in key impact sectors of agriculture, energy, manufacturing and transport.

The two-day event, organised by MicroEnterprises Support Programme (MESPT) and other proactive organisations in the private and public sector in Kenya that champion sustainable development, took place at the Kenyatta International Convention Centre (KICC), Nairobi.

EVENT THEME The theme for this year’s conference was, “Key sectorial opportunities in Kenya’s Green Growth Strategy.”

It is linked to the recently launched national Green Economy Strategy and Implementation Plan (GESIP) 2016-2030.

Discussions and exhibitions will be referencing to efforts contributing towards an inclusive social economic transformation spirit outlined in the GESIP. The event also provides a testament to Kenya’s commitment to pursue a sustainable development path in a changing climate.

KNOWLEDGE SHARING AND NETWORKING The conference gave participants the opportunity to share knowledge and to network.

It attracted actors and decision makers in the sectors of energy, agriculture, waste management, water resource management, green financing and academia sectors, among others.

Green growth presents a new approach to a sustainable economic development.

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HUSTLE EAST AFRICA

It puts human well-being at the centre of economic development while promoting wise use of natural resources.

People who have excelled in promoting green growth will also be recognised for their efforts.

BUSINESS OPPORTUNITIES The conference highlighted business opportunities for Micro, Small and Medium scale enterprises in the key sectors.

The opportunities will be mirrored against the triple ‘E’ model of checking the health of the economy through the lenses of ecology and equity.

This model is anchored on the Sustainable Development Goals (SDGs).

CLIMATE CHANGE The effects of climate change are real, hence the clarion call for all to be respon-

sible in carrying out economic, social and environmental development activities.

This year’s event aimed at rallying collective action towards green growth intervention in key impact sectors.

These sectors, according to the national GESIP, include agriculture, energy, manufacturing and transport.

CONFERENCE MODEL The forum had three key building blocks.

Plenary sessions hosted expert speakers and high level panellists discussing trends and impacts of climate change at global and local level, green economy in the context of sustainable production and consumption, Kenya’s green growth policies, strategies and commitments, key green growth financing opportunities in

CONFERENCE

ing Sustainable Development through inclusive Growth”.

the country, among other topics.

There were three breakout sessions focusing on three discussions on the role of micro, small and medium enterprises (MSMEs) in the stimulation and implementation of green growth development agenda in agriculture, energy, transport and manufacturing.

Finally, the exhibition block showcased green technologies available locally and how far Kenya has fared in promoting green growth.

while exploring ways of mainstreaming green growth in private sector enterprises.

The third edition of the conference was held in 2016 under the theme, “Accelerat-

EXPECTED CONFERENCE OUTPUT This year’s event marked the 4th conference and is expected to employ the most relevant approaches to disseminate the green growth agenda.

It will aim at establishing an effective green growth network.

Delegates to the conference will help ascertain green opportunities within key sectors identified in the GESIP document.

The event is also expected to enhance the awareness and adoption of green innovations and technologies.

It is expected that delegates will replicate proven interventions and approaches of green growth technologies, innovations and business models.

Stakeholders also identified strategies to mainstream MSMEs’ involvement in the green growth agenda.

Delegates developed a document that will guide stakeholders on how each can promote green growth.

Further, they recommended policies that can plug existing gaps in pushing for green growth initiatives.

FIRST CONFERENCE MESPT organised the first National Green Growth Conference & Exhibition in 2014.

The theme was, “Unlocking Green Growth in Kenya”.

The aim of this first conference was to create awareness on green growth initiatives, giving special focus to the roles of smart investments and public-private partnerships.

This forum revealed enormous potential and avenues for both the private and public sectors to partner and adopt green growth initiatives in different sectors.

The second National Green Growth Conference took place in October 2015.

Its focus was on “Kenya’s green growth environment and strategies for catalysing investment”.

The forum aimed to benchmark Kenya’s status in the global green growth arena HUSTLE EAST AFRICA

33

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Martin Koinange Biofix Manager at MEA Fertilizer Limited

Research has reported an increase in maize grain from 1 to 2.4 ton per hectare under ISFM systems compared to the sole use of mineral fertilizers

SOIL MANAGEMENT

Integrated Soil Fertility Management; A Solution to Food Insecurity

L

ow crop productivity is a perennial problem in Kenya among smallholder farms as a result of various unaddressed factors which include; the exponential decline in soil fertility, high fertilizer costs and the intensification of agriculture coupled with the reduction in farm sizes. In addition, chemical fertilizers do not directly improve soil physical structure or enhance soil biological activity and are often insufficient to maintain soil. Based on these major limitations to crop production, research on soil fertility, crop nutrition and socioeconomics in smallholder farming systems has been done in Sub-Saharan Africa (SSA) and shown that combined interventions on fertilizer and organic inputs coupled by use of improved crop varieties are prerequisite for achieving high and sustainable yields. Integrated Soil Fertility Management (ISFM) builds on this notion and is defined as: a set of soil fertility management practices that necessarily include the use of fertilizer, organic inputs, and improved germplasm combined with the knowledge to adapt these practices to local conditions with the aim of maximizing the agronomic use efficiency of the applied nutrients and improving crop productivity.

The use of improved germplasm enhances yield potentials as well as combat pests and diseases.

Mineral fertilizer-use in ISFM targets the formulation, placement, rate and timing of inorganic nutrient inputs. Integration of different fertilizer placement and/or rate practices such as microdosing, deep placement, banding, and harmonizing of inputs with rainfall and nutrient demands enhance nutrient uptake and productivity of crops.

Interventions on organic resource management targets the return of crop residues and use of manure, compost and other types of organic wastes.

Additionally, crop rotation or intercropping with legumes and use of beneficial soil micro-organisms make an integral part of ISFM. The last entry point of ISFM deals with any other amendments that may be needed to reduce the limitations to productivity such as correction of soil acidity, micronutrient deficiency, erosion, soil compaction or pests and diseases control measures. On the other hand, local adaptation of nutrient management refers to specific decision-making processes in relation to the allocation of agro-inputs and management practices at the farm level, thus recognizing produc-

tion objectives, resource endowments, and farmspecific soil fertility conditions.

The combined application of mineral fertilizer and organic inputs is practical to smallholder farmers because; (i) both fertilizer and organic inputs are often in short supply in smallholder farming systems due to limited affordability and/or accessibility; (ii) both inputs contain varying combinations of nutrients and/or carbon, thus addressing different soil fertility-related constraints; and (iii) extra crop produce can often be observed due to positive interactions between fertilizer and organic inputs. ISFM fits well with small scale farmers due to its wide applicability across different soil types, cropping systems and resources endowment.

Research has reported an increase in maize grain from 1 to 2.4 ton per hectare under ISFM systems compared to the sole use of mineral fertilizers. The higher productivity and yield stability achieved in the ISFM system prove that the practices significantly strengthen the resilience of crops to climate change impacts. Additionally, soil organic carbon content (an indicator of soil fertility) increases when fertilizers and organic inputs are combined as compared to when either is used solely.

Despite the significant benefits of ISFM in food security, the adoption of practices in African smallholder systems is usually low and incomplete due to; high costs of input and poor produce trading, shortage of credit facilities for making initial investments, high cost and imited availability of labor, small land sizes, lack of information about the soil status and rainfall forecasts, scarcity of organic inputs and competition of crop residues with livestock. Regardless of these challenges, ISFM remains the most sustainable solution to food and nutritional security among smallholder farmers.

35

FARMING

TEA SEC-

TOR

UPLIFTING SMALL SCALE TEA FARMERS

Owing to the myriad challenges facing the tea sector, the Kenya Tea Development Agency (KTDA) has implemented programmes and initiatives to improve small-scale tea farming

BY Hustle Staff Writer

T

he tea industry plays a significant role in Kenya’s agriculture sector and the country’s economy in general.

Tea accounts for about 11 percent of agriculture’s share of Kenya’s Gross Domestic Product (GDP). Additionally, it supports about 5 million people, directly and indirectly, making it one of the key sources of livelihood in the country.

Kenya’s tea industry comprises large and small scale sectors. The latter has registered more than half a million growers across tea growing zones in different parts of the country. The task of managing small-scale holder lies with the KTDA. Of all tea produced in Kenya, KTDA members generate over 60 percent while the rest is produced by large-scale farmers.

Despite the major contribution made by smallholder tea farming, the sector has faced many challenges in the last few years.

Mr. B. Bosire, the Corporate Affairs Officer at KTDA, says the agency’s mandate is to offer effective management services

36

HUSTLE EAST AFRICA

to the sector to facilitate efficient production, processing as well as marketing of high quality teas, and investing in related profitable ventures for the benefit of the shareholders and other stakeholders.

Value Addition of Teas before Export “Value addition begins right from the farm by deploying internationally recommended Good Agricultural Practices (GAPs),” avers Mr. Bosire. They entail proper husbandry, application of recommended fertiliser, fine plucking, as well as speedy delivery to the factory in wellaerated lorries to maintain high-quality standards.

The deployment of internationally recommended Good Manufacturing Practices (GMP) at the factory is another value addition point. It entails strict adherence to Hazard Analysis & Critical Control Points (HACCP), International Organization for Standardization (ISO) and Ethical Standards.

Additionally, factory direct sales (FDS) sales have been increasing over the years.

This has boosted sales through KETEPA, a subsidiary of KTDA. KTDA also owns Chain Trading Coop-

erative Limited in Mombasa that facilitates sale of tea blends. The company has introduced a brand of fully packeted tea known as Chai Gold. The tea is blended in Mombasa but packed in Dubai as it targets the international market.

Further, the agency has introduced bespoke manufacturer for specific packing companies in Europe, Dubai, and Japan.

Price Volatility In the last two years, the tea farming sector has experienced a raft of problems.

Most critical is the fluctuating market prices attributable to the glut in the global market. Tea prices at the Mombasa auction reduced considerably in July, August and September 2013 due to huge supply in the international market. However, Mr. Bosire notes that prices have improved in recent months due to the recent drought that has reduced available teas.

Tea cultivation is labour intensive. It includes field preparation, weeding, pruning and picking throughout the year. This leads to increased cost of production that is eventually reflected in low earnings.

The high cost of farm inputs such as fertilisers has also reduced profits.

The effects of climate change have become rampant, not only in Kenya, but the whole world. Climate hazards, which include hailstorms, floods, and prolonged drought result in destruction of the crop.

The outcome is reduced quantity and quality of yields.

The issue of declining farm sizes is another challenge experienced by some farmers. In most cases, they are expected to subdivide the land for their children, leading to reduced production.

Milestones Through expansion of existing factories and construction of new ones, KTDA has boosted capacity.

“Capacity increased from 665,000kgs Gl in 1999 to 1.41 Mkgs Gl in 2014,” Mr. Bosire observes. The most evident achievement has been in the growth of factories from just 45 in 2000 to 66 in 2014, translating to 21 new factories in 14 years. Currently, two factories – Boito and Motigo – under region five are being constructed.

Total payments to farmers have also been improved. Mr. Bosire highlighted that in 2013, farmers received Sh 57.30 per kg of green leaf compared to Sh 23.99 in 2001.

Tea is highly perishable and needs quick transportation to processing factories. In this regard, the agency has invested in roads maintenance and fleet modernisation.

KTDA has also introduced constant weight bags, which guarantee farmers real returns from their produce. The new

bags, whose purpose is to transport green leaf, is an initiative of improving service delivery. “They have reduced conflicts concerning tare weight,” Mr. Bosire asserts.

Additionally, the introduction of Electronic Weighing Solutions (EWS) has reduced conflicts that arise due to human errors. It has also curtailed weight falsification at the collection centre. The solution guarantees data accuracy by automating buying centre and factory weights. It has also removed the backlogs in records, long queues on delivery and heavy overheads of the former manual system.

Automated fleet management enables vehicles to be tracked. This has improved service delivery as performance is monitored in real time.

The agency has also adopted the mobile money platform technology used by farmers seeking finance from Greenland Fedha.

Promoting the Tea Industry The agency has put in place a range of programmes and initiatives intended to upscale tea production. To start with, it has Farmer Field Schools (FFSs) where farmers try out practically what they have learned and implement the same. FFSs bring together techniques and concepts that enable farmers to improve the sustainability of their crop yields.

Mr. Bosire points out that KTDA campaigns for sustainable agriculture by encouraging farmers to farm in a responsible way while enhancing profitability, individual welfare, and environmental conservation.

Farmers benefit from a fertiliser credit scheme where they receive the inputs on credit, and the money is recovered later from the bonus payment. This is beneficial particularly to some farmers who cannot afford to buy inputs at the time of planting.

The introduction of better yielding tea clones is expected to boost productivity and improve quality.

The unique shareholding structure has also ensured that farmers reap the full benefits of their investments.

KTDA has helped to stabilise market prices by introducing a stabilisation fund for growers to cushion farmers against fluctuations.

Mr. Bosire explains that initiating different market mechanisms would ensure tea farming reverts to its glorious levels of yesteryears.

Climate change is another challenge that needs to be looked at urgently, with a view to securing mitigation and adaptation practices, as well as conservation of all water towers, especially Mau.

HUSTLE EAST AFRICA

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