On day two in Nairobi, we headed first to Equity Bank’s headquarters where the gregarious James Mwangi and team told the story of the Bank’s exponential growth over the last twenty years and of its plans for the coming decade. When Mr. Mwangi first joined the bank in 1994, his strategy was to first create a culture of saving money among Kenyans. In order to be able to offer products and services, he needed Kenyans to consider Equity Bank to be a safer, though equally as affordable (ie., free), alternative to saving money under their mattress. By eliminating transaction costs, minimum balances and other fees, the number of bank accounts as well as deposits grew. Once this culture of saving had been established and they knew their customers better, the bank was able to confidently underwrite loans and sell products and services. Knowing that educated consumers are better customers, they have a 13-week financial literacy program for adults, as well as immensely generous scholarship programs for economically disadvantaged, yet academically promising high school students (Wings to Fly). Additionally, they have partnered with Mastercard to encourage entrepreneurship within Kenya and with USAID to create a sustainable and scaleable form of health care. All of these initiatives serve to create a stable and robust economy and train its future leaders.
The focus now is to grow within the mobile banking space. They have recently launched their mobile banking app ‘Eazzy Banking’, whose sophistication you can check it out HERE. It allows for immediate money transfers between bank accounts and to other mobile pay systems (Airtel, MPESA, Orange), immediate loan applications, and the ability to personalize (savings goals, ‘selfies’, billpay). We look forward to seeing it grow.
From Equity Bank, we went to Safaricom the leading cell carrier and mobile payment platform, with its M-PESA app, though itself not a bank. We were greeted by CEO Robery Collymore and his team, as well as a delicious spread of fruits, hors d’ouvres and our first taste of Dorman’s coffee (this one instant – yet savory and delicious). Safaricom, like Equity Bank and AKDN, is in the business of ‘transforming lives’. They are doing this by improving the flow of goods, services, and cash. With M-Pesa, a mobile payment platform, East Africans can, for a small transaction fee, text payments to each other. While seemingly simple, this has massively changed and improved the lives of so many. For example, foreign aid can be distributed in the form of credit, like a food stamp, that refugees can use to ‘purchase’ foods that they’re culturally inclined to eat, instead of receiving rice or corn grown halfway around the world and shipped to them. Not only this support the local economy when local shops are reimbursed for goods they ‘sell’, but reduces the carbon footprint by eliminating the need to ship all this food.
Safaricom, too, has launched many initiatives to encourage growth within the Kenyan economy. Their Spark Fund sponsors and invests in tech startups in Kenya, the M-Pesa Academy provides first-rate education to high schoolers and Linda Jamii offers affordable healthcare.
After lunch, we stopped by Sun Culture – a thriving startup that offers small-scale subsistence farmers access to affordable solar driven irrigation systems. For ~$1,600 USD (payable upfront or via customized financing correlated with the harvest seasons) a farmer can purchase an irrigation system for about 2.5 acres. Technicians train them how to use them and work with them to teach them best practices. Francis – our technician for the day – showed how the solar panels work, explained how the height of the water tank is related to the depth of the pump and broke down the difference in cost for mist irrigation tubes (less expensive because you only need one in between rows, but less efficient and more wasteful of water) and drip (more expensive, because you need one for each row of plants, but more effective because of the precise distribution of water).
Currently, onions and peppers are the preferred cash crop, and maize and potatoes being the least valuable, though are staples in the Kenyan diet. Kale has yet to achieve the status it has in the states. Sun Culture’s CEO, Sameer Ibrahim, is an NYU Stern alumn whose family comes from Kenya. Jon Saunders (CBS ’14) is Director of Finance & Operations. They offer a great internship opportunity for CBS students.
Our final official visit was with Paul Kavuma of Catalyst Principal Partners, a small to mid-cap, growth private equity company investing in companies focused on doing business in East Africa. Paul has a dynamic personality and provided us with incredible insight into the potential rewards for those ready to invest in East Africa. We talked about toothpaste, tea biscuits, water from Ethiopia and tea. All of these consumer products have a huge market which been inefficiently tapped or production processes screaming for streamlining.
Paul Kavuma left us with some words of wisdom, advising us to know where we want to end up, but not worry about the path we take to get there. As long as our career is moving forward and interesting and we have a vision of where we want to end up, our paths will lead us there.