Starting a Microfinance Business at age 19

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Best Ayiorwoth, winner of the 2013 Anzisha Prize

When Ugandan Best Ayiorwoth had to cut short her high school education because her family could not afford to pay her tuition, it broke her heart. However, this became the driving force that inspired her to start an award-winning microcredit business, at just 19 years old, that would go on to help hundreds of women and young girls in Uganda.
 
“Personally, I love being educated. I always wished to go to high standards in my education if it was possible. But unfortunately I did not have the chance to go to the level of education I wanted and I stopped at Secondary Four in Uganda,” Ayiorwoth said.
Having lost her father at the age of eight, Ayiorwoth’s mother strained to look after a family of seven in the Nebbi District in northern Uganda.

“My mother pushed me up to Primary Seven and she died while I was desperately waiting to join high school. I was 13 years old then. My two older sisters and brother struggled to push me to Secondary Four,” she explained.

“I never wanted to stop at that point in my education so it angered me… I would always remind myself that someday when I could, I would ensure that every girl child in my community received the best education they could.”

Start-up capital from her first salary
At the age of 17, Ayiorwoth moved to Kampala and joined vocational training schools that offered courses such as catering, graphics and web design. She later joined S7 Project, a skills empowerment centre, and got trained in catering and entrepreneurship. Through S7 she got a job working in a Mexican restaurant, where she received her first salary and the startup capital she would later use to follow her dream.

“I wanted to prevent what happened to me from happening to other girls because I knew it was a social injustice. So the first salary I got from the restaurant is what I used to open my organisation,” explained Ayiorwoth.

She realised that if she could empower mothers financially, they would support the education of their children, especially young girls. “I have seen that when families can’t maintain all their children at school and have to make a choice, they would often choose a boy over a girl,” she highlighted.

In early 2011 Ayiorwoth went back to the Nebbi District – where she had witnessed many girls, like herself, drop out of school – and started the Girls Power Micro-Lending Organisation (GIPOMO).

Using her savings of USh 100,000 (US$40), Ayiorwoth started slowly by giving monthly micro loans to enable women to grow their small businesses. With a 10% interest rate, she kept reinvesting her profit back into GIPOMO. It wasn’t long before her initiative caught the attention of her mentor at S7, who loaned her an additional USh 800,000 ($322) to boost her enterprise.

“My organisation has a unique twist in microfinance by providing tied loans to women who make a commitment to grow businesses while keeping their girl children in school,” added Ayiorwoth.

Today GIPOMO has helped 64 women start their own businesses, 111 women expand their existing businesses, and kept 168 girls in school by supporting their mothers.

At the beginning of 2013, Ayiorwoth won USh 1m ($400) at the FINA Africa Enterprise Business Challenge. In August she won first place and US$25,000 at the Anzisha Prize, a competition that recognises and celebrates African entrepreneurs under the age of 22 who are using entrepreneurship to solve problems in their communities.

Using a portion of the prize money, GIPOMO has already scaled up its operations four-fold, expanding to four different sub-counties in northern Uganda.

Innovative thinking to overcome challenges
Ayiorwoth started off providing credit to individual women but after two did not repay their loans, she changed her business strategy. She decided that in order for women to access finance, they needed to belong to a group of at least three. The strategic thinking behind this was that the women in a community knew each other and could group themselves with people they trusted to become guarantors for each other’s loans.

“We give them the freedom to choose who they want to be with in a group so that loans are secured. So if one woman has a problem of paying then the two others can always figure it out and stand in for that person,” explained Ayiorwoth. “This makes it easy for women without formal collateral to access financing in an easy way.”

Another challenge Ayiorwoth faced was that many of the women she worked with were illiterate, and the use of multiple languages made communication a challenge. To reduce this problem she collaborates with local government women representatives in communities to assist with communication.

Furthermore, Ayiorwoth explained that if she discovers that the mothers are not investing in their daughters’ schooling through income earned in their business, they will be disqualified from accessing finance from GIPOMO.

“That is the reason why we sometimes talk to those girls personally and we enquire exactly what is happening,” she added.

GIPOMO has also launched a Women in Agriculture fund, in collaboration with the Ugandan government, to provide microfinance to women interested in commercial agriculture and value addition.

Ambitious plans for the future
At the moment, GIPOMO only operates in one district in northern Uganda but Ayiorwoth, who has just turned 22, has big plans for her organisation.

“Right now I’m just trying to lay a good foundation so we can achieve real impact in one district. But in five years I see my organisation directly reaching 5,000 women in northern Uganda; and in 10 years, launching similar initiatives in different parts of the country. And we can even go further ahead and say that I see my model being replicated in various African countries because I know that the same problems are faced elsewhere,” she emphasised.

“For me, this is a new movement that redefines microfinance; to provide for specific needs in specific communities. Microfinance can never be relevant if it has one model. In one community, it should provide affordable finance for girl education and in another, it should provide affordable finance for land ownership – whatever the challenge a community faces.”
According to Ayiorwoth, GIPOMO is also launching an Education for Girls fund that will focus on providing no-interest loans to households interested in enrolling out-of-school girls into a skills development programme.

“I believe that once the girls possess practical skills, the chances that they will establish enterprises that apply these skills are high,” said Ayiorwoth. “In this way, my organisation would be developing a new generation of mothers that are skilled, entrepreneurial and financially empowered to contribute to family welfare and the education of their daughters.”

Advice to other young entrepreneurs
Ayiorwoth accredits a lot of her success to her mentor at S7, which she said continuously encouraged and challenged her to utilise her full potential.

She also wants to tell other young entrepreneurs that, no matter what their background, they have the potential to make a difference in their lives and the lives of others.

“They have to actually do something that they feel strongly passionate about, and in most cases they should seek inspiration from their own experience… If you had a terrible experience, you should despise the experience to the extent that you are continuously seeking a solution for it,” she concluded.

Source: How We Made It in Africa

AfDB advocates increased Women Entrepreneurship in Africa

AFRICAN Development Bank (AfDB) has called on African countries to tackle the negative factors that are inhibiting the expected development of women entrepreneurship on the continent.

President of the bank, Donald Kaberuka, in his speech at the second African Women Economic summit in Lagos at the weekend, identified the factors as lack of collateral, outdated customary laws and practices, which prevent women’s right to properties and challenges of registering new businesses in the region.

According to him, some banks do not recognize women’s credit worthiness, ‘although they receive high credit rating from micro-finance institutions. “We must move on from these rudimentary constraints to issues such as innovative financing opportunities, mentorships and partnerships for women in business.

“Much more needs to be done to enhance the productivity of women in economic development. But the situation is not dismal. We are building upon previous achievements - reflected in our presence in this room today”, he said.

Kaberuka explained that women have always played a pivotal role in the socio-economic development of Africa. As farmers, entrepreneurs, traders and innovators, they are key economic actors in the continent, adding, “I believe, strongly believe investing in women differently is essential to revitalise our economies.

Earlier, Nigeria’s Minister of Finance, Ngozi Okonjo-Iweala, in a keynote address, emphasised that women’s economic empowerment was no longer an option because investing in women who constitute half of the continent’s population was the only way to sustain the growth recorded across the continent.

“Women are the third largest emerging markets in the globe. Women are the third largest sources of growth. One of the fastest ways to sustain current growth is to invest in women,” Okonjo-Iweala said.

She recommended the establishment of a specialised Bank to take up the financial interest of women, who do not have access to investment finance due to a host of reasons.

Also addressing the gathering, New Faces New Voices Executive Director, Nomsa Daniels, said in the next two years, the organisation would focus attention on the development of a data base on women participation in entrepreneurship, financing and the economy.

She said the group, which currently has chapters in 16 countries, would also organise capacity building programmes, financial education and enlightenment courses for women.

New Faces New Voices Advisor and a former AfDB Vice President and Chief Operating Officer, Nkosana Moyo, explained that finding ways of empowering women with quality health, education and finance was of utmost importance. “Women are actually a huge market segment and the most essential tool we need for the development of the continent. So, we need to develop financial products that can help to fully utilise their potentials.”

Source: The Guardian, Nigeria

African gov'ts should enhance Entrepreneurial Capacity of their Citizens

Former President of Ghana, J.A. Kufuor

Former President, John Agyekum Kufuor has commended the African Development Bank (AfDB) for diversifying its base to cater for the private sector in Africa and enhance their capacities.

He said by opening up to the private sector, the bank, which dealt almost exclusively with governments and the public sector in the past, was laying the foundation for building a strong and competitive entrepreneurial class worthy of competing evenly on the international stage.

Former President Kufuor was speaking on: "Challenges and Opportunities of Entrepreneurship and Capacity Development in Africa," at the Eminent Speaker's Forum of the AfDB at its headquarters in Tunis, Tunisia on Friday, a statement signed by Mr Frank Agyekum, Spokesperson to the former President said.

The function was chaired by Dr Donald Kaberuka, President of AfDB and attended by the bank's top hierarchy, financial experts, the banking community and diplomats.

Former President Kufuor said although Africa abounds in entrepreneurial talents, the continent lacks the technical know-how and informative knowledge of the market to take advantage of the benefits of globalization.

"The indigenous entrepreneur by himself is so seriously handicapped by history and lack of practice. But his failure, automatically, is also the failure of his nation which becomes the dumping ground for imports which could otherwise have been produced competitively locally and which would have enhanced job-creation and employment.

"Therefore, it behoves the public sectors of the economy to join forces to strengthen and deepen entrepreneurial capacity as the main agency for a nation venturing into the international market successfully," he said.

The former President said for Africa to get and secure its fair share of the market, it may be necessary to enter into partnerships that ensured know-how, capital and market for competitive advantage.

He said: "The critical mechanism to enlist such partnership is efficient and effective negotiating skills, which governments within their regulatory authorities should assist their private sectors with as they enter into partnerships with their foreign counterparts.

"The opportunities that would issue from the institutionalization and practice of the concept of Public-Private Partnerships as the cornerstone of Africa's development will be legendary.

"The continent abounds in practically all the raw materials requisite for sustained industrial, agrarian and economic transformation for its people's.

"It has the potential to become the single biggest market in the world in the foreseeable future. This is why it is being courted from the East and West. Now more than ever, it requires leadership of insight both in its political as well as its financial and intellectual institutions to guide and mainstream itself into globalization."

Former President Kufuor earlier on Thursday had separate meetings with Dr Ben Jafaar, President of the Constituent Assembly, which is drawing up a new constitution for Tunisia, and Mr Beji Caid Essebsi, who became Prime Minister in the wake of the Tunisian crisis that precipitated the Arab Spring and helped to bring the country back to normalcy.

Former President Kufuor will arrive in Shanghai, China Sunday for the second China-Africa Forum.

Source: Ghana News Agency

Ghanaian Banks are "Hot"

Tomatoes traders in Nima market. © EnterpriseAfrik

As Ghanaian bankers crack their brains on how to mobilise the vast financial wealth of the informal sector without exposing themselves to a sector regarded as extremely high risk, a new crop of young, finance-savvy entrepreneurs operating in the non-bank financial sector seem to be making a go of it.

With a combination of innovative savings products and credit arrangements, non-bank financial institutions in Ghana are sprinting ahead of the still sluggish banks in tapping the vast wealth of the informal sector.

First Capital Plus Saving and Loans (FCP) is arguably the fastest growing non-bank financial institution at the moment, having expanded its branch network to six within its first full year of operation with a view to increasing it to 18 by the end of this year.

In June last year, the entity introduced a new product onto the Ghanaian market that enables customers to deposit money into their accounts 24 hours a day via their mobile phones, the first in Ghana’s banking history.

Called SpeedBanking, it is akin to loading credit onto a mobile phone. What one needs to do is first to open an account with FCP. Subsequently, the account holder can buy SpeedBanking Vouchers with face values ranging from GH¢2 to GH¢1000 which you scratch to send a codified 12-digit number, just like loading mobile phone credit, to particular number for all networks and you receive immediate notification via SMS of the face value of the voucher being credited to your account.”

The Chief Executive Officer of FCP, Mr. William Ato Essien, was quoted by Ghana Business & Finance Magazine as saying that “the new service is targeted at the unbanked and under-banked to integrate them into the formal banking sector.”

This solution makes banking simple and more accessible, thereby roping in a lot more people into the formal banking system, he added.

Mr Ernest Osei, a retailer at Accra’s Kaneshie market who now uses SpeedBanking, told this paper, “I now do not worry too much about the risk of carrying my daily sales to the bank. After any substantial sales, I just buy a voucher and send the money into my account.”

With innovations that either seek to advance credit or mobilize excess liquidity in the informal sector, it is no surprise that there has been a recent explosion of finance in the microfinance sector.

The numbers speak for themselves. Statistics from the Survey of Apex Bodies show that by the first quarter of 2011, there were more than 300 formally registered and regulated credit unions nationwide. Registered microfinance companies operating under the lenders ordinance number at least 200, but there are estimates of over 1,000 such companies existing throughout the country. Individual susu collectors, categorized as informal financial suppliers, also have approximately 2,000 members registered with the Ghana Cooperative Susu Collectors Association. Again, more than 5,000 are estimated to exist nationwide.

Mr Dzigbordi Agbekpornu, Chief Operating Officer of Dalex Finance & Leasing, one of the country’s fast growing non-bank finance institutions, said the expansion of credit to the informal sector is a positive development.

“The proliferation of financial institutions that provide entrepreneurs easy access to credit, even if not at comfortable rates, can only be a healthy development given numerous complaints by entrepreneurs that the lack of access to credit is hindering growth of their businesses,” he told Economy Times in Accra.

The country’s commercial banks may be green with envy about the inroads non-bank financial institutions are making into rich virgin territory, but the Bank of Ghana, the industry regulator, is anxious to see banking make an even greater impact on the informal sector.

Ghana’s banking sector has grown rapidly in the last five years owing to fresh capital injection by existing banks to meet minimum regulatory capital requirements, as well as the entry of nine banks from the West African sub-region and Asia, bringing the country’s total number of banks 27.
A couple of years ago, the Bank of Ghana itself rolled out a smart card, the e-zwich, by which it hopes to mop up excess liquidity, as well as encourage the banking habit among informal sector operators.

But the product has not yet caught the fancy of both informal sector operators and the banking public and now faces tremendous competition from innovative products that enable mobile phone subscribers to carry out financial transaction via their handsets. 

Source: Economy Times, Ghana

Association of Small Scale Industries goes into “Susu"

Metal molding worshop in Kumasi. © EnterpriseAfrik

The Association for Small-scale Industries (ASSI) is developing the mechanism for the implementation of a “Susu Scheme” to augment the financial base and businesses of members.

The Scheme, a collaborative work between ASSI and Synovus Financial Corporation of the Netherlands (SNV), would provide credit facilities for small-scale industries with a flexible loan recovery rate.

In addition, the SNV would give technical assistance to the industries in the areas of Budgeting, Business Risk Management and Analysis, Marketing, Packaging and Organizational Development as well as Product Development.

Mr Kwame Buor, Ashanti Regional Chairman of the Association, made this known at the inauguration of the Asante Akim North Municipality branch of the Association at Konongo.

He expressed worry at the high interest on loans charged by the banking institutions, saying the situation had over the years led to the collapse of many small-scale industries.

Mr Buor said he was optimistic that, the Scheme would eventually alleviate the challenges small-scale industries go through as they seek credit facilities to expand and also sustain their businesses.

He appealed to members to be receptive to new ideas in coming out with innovative products to facilitate their marketability on the world market.

He appealed to the decentralized assemblies to support small-scale industries in organizing Business Fairs in their areas to market their products.

Mr Obeng Mireku, the Municipal Chairman of the Association, called on all small-scale entrepreneurs to join the Association to help streamline their activities.

This would also allow them to access credit facilities with less difficulty whilst benefitting from the exchange of ideas.**


Source: Ghana News Agency

Bank of Ghana receives 300 applications for Microfinance Operations

The Bank of Ghana has received over 300 applications from firms seeking to operate under the second tier of the regulated microfinance institutions.

Regulated activities under the Non-bank Financial Institutions Act 2008, increased from a single tier to four tiers, to include Susu companies, Susu collectors, money lenders and Financial NGOs.

Susu companies taking deposits and making profits are to operate under the second tier of regulated regime, which was expected to take effect from January 2012.

Such companies are to hold an initial minimum paid-up capital of not less than Gh¢100,000.00 for one unit office.

Franklin Belnye, Director, Banking Supervision Department, Bank of Ghana says issuance of licensing should begin by the end of this quarter, when processing of applications is concluded.

“The licensing process is going to be in two steps; the provisional process and the final license. The provisional process allows us to see that your position is feasible, the business can operate but we need to know more about the people behind the company; we have to do due diligence checks on them…after that only can we issue the final license”, he told Luv Biz Report at the maiden Annual General Meeting of the Ghana Association of Microfinance Companies (GAMC) – Northern Sector.

The AGM was on the theme: “The Era of Microfinance Regulations in Ghana, Prospect and Challenges.

The Association is recognized by the Bank of Ghana as an umbrella body for second tier microfinance operators, to ease dissemination of policies and programmes and instill sanity in the industry.

National Board Chairman, Collins Amponsah-Mensah, says the regulation is enriching the operations of the sector “because the regulation comes with conditions and we’re all putting our systems in place in a way that we’ll be able to qualify for the license from the regulator”.

The Association is intensifying its outreach programme to register more microfinance firms to obtain the requisite license to operate.

Source: myjoyonline.com

MicroEnsure Ghana to launch Credit Health Insurance for Microfinance clients

Traders in a market in Accra. © EnterpriseAfrik

The Ghanaian branch of MicroEnsure, a UK-based subsidiary of nonprofit Opportunity International that serves as a microinsurance intermediary, has announced plans to offer credit health insurance to microfinance clients in Ghana.

The product will enable MicroEnsure to cover weekly microcredit repayments in the event that the borrower is admitted to the hospital during the loan term.

Clients will need to present proof of admission and discharge from a recognized inpatient hospital in order to file a claim. The cost of the coverage will start at USD 0.25 per month and will cover loan payments for any health condition for any amount of time.

According to Eugene Adogla, director of operations in Ghana, MicroEnsure expects to pay hundreds of claims that range between USD 30 and USD 60 each month. Fiona Laryea, general manager of MicroEnsure in Ghana, stated that MicroEnsure Ghana also hopes to extend coverage to clients’ families.

Two unnamed microfinance institution (MFI) partners of MicroEnsure Ghana have signed up for the new product, and more organizations have reportedly expressed interest.

MicroEnsure serves approximately 3.5 million poor clients in Ghana, India, Bangladesh, Mozambique, Malawi, the Philippines, Tanzania and Kenya as of 2011.

Source: microcapital.org

A Ghanaian Chief advises Entrepreneurs to save with Credible Financial Institutions

The Paramount Chief of Lower Dixcove, Nana Kwasi Agyemang IX, on Wednesday admonished entrepreneurs and businesses to utilize their resources judiciously by saving with credible financial institutions.

He entreated petty traders and entrepreneurs to investigate the credibility of financial institutions before transacting business with them so that they do not run at a loss.

Nana Agyemang gave the advice at the opening of an ultra modern office complex of GHAMFO in Takoradi to coordinate and administer its activities.

He commended the GHAMFO Investment Savings and Loans Limited for distinguishing itself as a credible financial institution over the years and offered financial support to women in particular to boost their trade.

Ms Elizabeth Tawiah, Chief Executive Officer (CEO) of GHAMFO, said the company had 15 branches in Western and Central Regions.

Some of the branches are located in Sekondi, Daboase, Aiyinase, Tarkwa, Agona Nkwanta, Dixcove, Mankessim, Simpa, Dompim, Akwidaa, kojokrom, kokompe, Essiama, Takoradi and Nsuaem.

Ms. Tawiah said the company started as a non-governmental organization in 2007, which trained women in batik, tie and dye, soap making, sewing and catering.

After sometime, the NGO developed into a micro support scheme and offered financial support to women to improve their businesses.

It later methaphosized into a financial institution and offered services such as fixed deposit, loans, educator savings plan, old-age savings plan and kiddies savings plan to its customers, she said .

The CEO said the company aimed at ensuring financial independence to the needy and underprivileged in society.

Source: Ghana News Agency 

Ghana Trade Ministry Launches $2.8 million Fund to support MSMEs

Palm oil producers in Kumasi. © EnterpriseAfrik

Traders in Nima market. © EnterpriseAfrik

The Minister of Trade and Industry, Ms Hanna Tetteh has launched a 2.8 million dollar Business Development Services (BDS) Fund with a call on the private sector to access the facility to improve their business performance.

The fund, in its second phase, is a matching grant scheme that aims to provide the Micro Small and Medium Enterprise (MSME) with technical assistance to improve their business operations and competitiveness.


Out of the total grant amount available, 1.3 million has been earmarked for projects in the area of renewable energy under the Ghana Energy Development and Access Project.

This support for renewable energy is to stimulate and develop markets, suppliers and projects for renewable energies, targeting electricity provision for mini-grid, grid-connected and off-grid applications

Small and Medium Enterprises (SMEs) account for over 80 percent of businesses in the country but are constrained by access to capital, markets and many other services.

Ms Tetteh urged potential applicants to submit their applications for assistance on time as the second phase would end in October this year

Francis Kusi, Coordinator of the Micro Small Medium Enterprises, said the fund would subsidies a maximum of 50 percent of the total costs of approved projects.

He said under the access to Finance component, support is given to increase the creditworthiness of prospective clients of the partner banks, thus increasing the number of new SME loans and also assist those SMEs, which received loans from partner banks to remain bankable.

It would also provide support to financial institutions that wish to develop and expand term lending to SMEs or to develop additional financial instruments suitable for SMEs.

On access to markets, he said the fund, support eligible MSMEs to get non-financial services that could improve their productivity and competitiveness, enable BDS providers to develop and market specialized BDS that are appropriate and affordable to MSMEs;

In addition, improve market information and public-private dialogue through support to business associations and policy advocacy groups. The Fund will also facilitate linkages between MSMEs and larger firms and markets through support to clusters of firms or lead firms working with such clusters of MSME suppliers.

The BDS fund, which is currently being implemented by Triodos Facet of the Netherlands and SNV Netherlands Development Organisation is focused on MSMEs throughout the country, with emphasis on value chain, such as cosmetics, fish, fruit, plastics, salt, palm oil and other value added activities.

CEO of First Capital Plus wins Global Professional International Achievers award

Mr. William Ato Essien and by extension First Capital Plus has been awarded the Global Professional International Achiever Award (GPA), Banking and Finance category at the 10th GPA Awards held on Friday, 16th December, at the Banquet Hall, State House. Other Nominees in the category included the CEO’s of Databank and Zenith Bank.

The 2010 GPA awards dubbed: “10 years Celebrating Icons of Innovation", is aimed at inspiring existing and young professionals to develop a mind-set of becoming globally savvy while adopting Social responsibility initiatives.

The award was given to Mr. Essien for transforming First Capital Plus from a small micro-finance NGO into a financial powerhouse within just a period of two years through inspirational leadership and innovation.

It was also in recognition of his various societal impacting activities like the William Ato Essien Foundation (WAEF) which was established in June 2011 to:

• Assist under privileged children
• Provide financial support to the deprived
• Provide medical support to the needy in society
• Assist in educating the less privileged

In his acceptance speech Mr. Essien, attributed the award to “the doing of the Lord” and thanked the Management and staff of First Capital Plus for working assiduously to make First Capital Plus a key player in the financial services Industry.

In attendance were; Mr. Kofi Mensah (COO), Mr. Stephan Antoh (Executive Manager, Corporate Affairs, Legal & HR), Oheneba Osei Akoto (Executive Manager, Speedbanking & Business Dev’t) and other members of Staff. 

Source: Myjoyonline.com

Kenyan opens up Banking to the Poor

Bankers are often seen as only serving the interests of the rich, especially in the wake of the financial crisis, but Kenya's James Mwangi has managed to transform his company's fortunes while still offering services to the country's large poor population.

James Mwangi

Kenya's Equity Building Society was founded in 1984 with the goal of providing mortgage financing to low-income Kenyans.

But poor management and insufficient board supervision, among other factors, contributed to its deterioration and a decade on, the Central Bank of Kenya warned that Equity was on the verge of insolvency.

With the sword of bankruptcy hanging over their heads, in 1994 the building society's board of directors decided it was about time to include independent members in their rank and to recruit externally for managers.

That was when James Mwangi - who had worked with Ernst & Young and Trade Bank, and had been banking with the society for a couple of years - came on board as its finance director. 

"I jumped into the sinking boat so there were no two choices. There was only one way out: salvage, salvage, salvage," he told the BBC's series African Dream.

He said that, to his surprise, they managed to rescue the bank without having to recur to a reinvigorating injection of external capital.

"We used customer experience. I just trained the staff to give customers an experience they had never received before and what attracted customers was initially that customer service," he explained.

"And consequently we used customers' deposits to leverage. For three consecutive years, we had negative capital. We were leveraging on customers' deposits."

Microfinance

In the following years, Equity went from success to success and by 2000 its pre-tax profit was growing by nearly 80% a year. 

Mr Mwangi became the company's CEO in 2004 and two years later Equity - which had already been moving under his guidance from mortgages to savings and loans - was listed as a commercial bank on the Nairobi Stock Exchange.

Despite the changes of fortunes resulting from its new business strategy, Equity maintained the empowerment of Kenya's poor as a core value through its microfinance scheme.

"I think that what kept me going was that I was pursuing an idea. It was not an interest. It was that, in the fullness of time, we would make financial services accessible to the majority of Kenyans," Mr Mwangi told the BBC's Kevin Mwachiro.

"Every moment we looked there were signs that we were making progress. That constant progress is what gave us the strength to move on."

Over the years, Equity Bank has spread it wings across the region. It now has more than 7.5 million customers and has become one of the biggest financial companies in Kenya and East Africa.

Mr Mwangi considers that the bank's success has to a great extent been fuelled by passion and enthusiasm.

"If you look at Equity, it's an emotional business. People are driven by emotions and it's all about the enthusiasm of liberating our people, empowering our people to transform their lives and livelihoods," he said. 

'Symbiotic relationship'

In 2010 Mr Mwangi was named by the Financial Times as one of the 50 emerging market business leaders that have shaped the economic performance of their regions.

In September 2011 the Africa Investor magazine chose him as the African Banker of the Year for the second year in a row. 

He says that his motivation throughout has been to make a personal contribution to reducing poverty in Africa.

"You do good to society, they support the business, so it's a symbiotic relationship that seems to grow simultaneously," he said.

And what advice would he offer to people would are looking for capital from institutions like the one he directs?

"Prepare, prepare, prepare because you're competing for capital and capital is looking for prepared entrepreneurs," he said.

However, in his opinion, aspiring business people should also look beyond banks, at other factors of production.

He also thinks that they should try to get coaching and mentoring from those who have been successful.

"They have overcome all the odds, they borrowed from the banks so they have the know-how, and one need not reinvent the wheel if it has already been invented."

Source: BBC

MASLOC gives Kokompe fire victims GH¢1m

The Micro-Finance and Small Loans Centre (MASLOC) has presented a cheque for GH¢1 million to the fire victims of the Darkuman Kokompe Spare Parts Market in Accra.

A total of 210 spare parts dealers whose wares were destroyed by the fire a month ago are to benefit from the loan.

The loan, which is to be paid within 12 months with a two-month grace period, attracts a total of 24 per cent interest.

The release of the loan followed a directive by the Vice-President, Mr John Dramani Mahama, to MASLOC to assist the fire victims to get back to business. That was when he led a government delegation to make a donation of roofing sheets, pieces of wood, bags of cement and nails to the victims a month ago.

Fire gutted more than 4,000 shops at the market a month ago, destroying vehicles, spare parts and other items running into thousands of Ghana cedis. No life was lost.

Presenting the cheque, the Chief Executive Officer of MASLOC, Ms Bertha Ansah-Djan, said the spare parts dealers played a crucial role in terms of selling vehicle spare parts to many Ghanaians.

Therefore, she said, the extension of the loan was to help the fire victims to re-start and grow their businesses so they could continue to serve the people.

Ms Ansah-Djan asked the spare parts dealers to build their stores in concrete to prevent or mitigate the effect of fire outbreaks.

She stressed the need for them to insure their wares to enable them to get some assistance to re-start business in the event of any loss of property.

She urged the expected beneficiaries, who had been constituted into 10-member groups, to try to repay their loans on time.

The Accra Metropolitan Chief Executive, Mr Alfred Vanderpuije, said the presentation of the cheque was a testimony of the Better Ghana Agenda, which sought to improve the living standards of the people.

He charged the spare dealers to continue to maintain the standards that had enabled them to secure the loans, since that was the only way that they could grow their businesses.

Mr Vanderpuije stressed that many Ghanaians depended on them for spare parts and asked them to be “responsible in their operations”.

The Chairman of the Kokompe Spare Parts Dealers Association, Mr Kingsley Anane Yeboah, thanked the government for the prompt manner it facilitated the release of the loans.

He said the loans would assist the fire victims to get back to business, and gave an assurance that those who would benefit from the facility would repay the loans promptly.

Source: citifmonline

Micro-credit Scheme for Young Entrepreneurs in Southern Ghana

Microentrepreneurs in Ghana.

© EnterpriseAfrik

Traders in a local market

An Entrepreneurial Development Fund with an initial amount of 25,000 Ghana Cedis has been established to provide micro-credit for Young Entrepreneurs in Ketu-South District, Ghana.

The revolving fund known as Ketu-South Youth Entrepreneurial Fund was initiated by Mr Fifi Kwetey, a Deputy Minister of Finance.

Mr Kwetey, who announced the initiative at a day’s workshop, dubbed: “Destiny Changing Seminar,” on the theme: “Transforming the Youth of Ketu and Raising Future Giants for Ghana”, said it targeted tertiary students, young graduates and youth leaders.

Topics discussed at the seminar included: ‘’building hope for the future,’’ job hunting to job creation’’ and ‘’procedures in enterprise formation.’’

The event is to engineer a new generation of people to create jobs for themselves, break the cycle of the mass hunt for non-existent jobs, sometimes by job seekers without skills.

Mr Kwetey said the Fund to be manned by a Board of Trustees would grant credit to only “serious-minded people”.

He asked the youth to brace up for challenges in life, saying no amount of projects could bring development to people whose mindsets were not tuned towards change.

Mr Charles Sam of Golden Future Promotions, an inspirational speaker, observed that many family enterprises collapsed on the death of their founders because of weak management structures.

Mr Emmanuel Dei Tumi of Foundation for Future Leaders told the participants that it was illusive to look to the government to solve all problems instead they should be innovative.

Mr Emmanuel Sarkodie, Chief Executive Officer of the CDH Financial Holdings, who talked on Enterprise Formation and Procedures, commended Mr Kwetey for the initiative.

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