Tuesday, June 30, 2015

Former sand dealer on why you should invest in real estate

Dinara Developers Ltd owner Andrew Kamau. JEFF

Dinara Developers Ltd owner Andrew Kamau. JEFF ANGOTE |  NATION MEDIA GROUP

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For Andrew Kamau, selling building materials was all his day’s work diary would read a few years ago. The city’s high-end estates — Lavington, Kileleshwa and Runda — provided him with a reliable stream of customers.

“I used to supply sand, ballasts, stones from Ndarugu quarry and from the little earnings, I was able to raise Sh300,000 savings,” said Mr Kamau, adding that in 2009 a piece of stone was going for Sh36 and he would sell about 1,200 units in a good day.

Armed with his savings, Mr Kamau bought a two-and-a-quarter-acres at Makongeni, in Thika at Sh3.5 million. He paid Sh350,000 deposit and after sub dividing it, he sold the plots, paid the land owner the balance and made Sh3.5 million profit.

Buoyed by the impressive returns, he shifted gears and started buying land, constructing houses and selling them.

His first housing project was near Kenyatta University where he bought half-an-acre and built 49 bed sitters on half of the plot and sold the other to finance the construction. The units sold at Sh250,000 each earning him over Sh12 million.


And at the age of 27 years, he built his first residential house, a two bedroom unit, which he sold at Sh1.6 million.

Today, Mr Kamau, 31, is the brains behind Green View Apartments, Diamond Heights in Kikuyu, Mashariki Park Project, Mazuri site Apartments in Thika, Kajiado and a multi-million shillings 36 house units project at Thindigua on Kiambu Road.

At Dinara Developers Limited, the real estate company he started in 2009 that he runs together with co-director Francis Wachira Muguku, he says, apartment prices range between Sh2.5 million for a one bedroom house and Sh12 million for a three bedroom unit.

“I make between Sh20 million and Sh25 million per month. Real estate is the place to be,” the father-of-one told Money.
His tale can be best described as dust to riches story that has seen him set Nairobi’s thriving real estate business alight.

“I want to remove this notion among young people and the old generation that one can only be a millionaire and own a house at a certain age,” he said at his 2,500-square-feet office at Sound Plaza on Woodvale Groove, in Westlands, Nairobi.

Last year, when he went searching for land in Kiambu County to put up houses, he bumped onto a landlord who was selling a three-quarter acre at Sh70 million. However, he was shocked when the seller refused to accept his fat pay cheque.

“She looked at me and asked, ‘young man, when did you start working to amass such wealth?’ I was shocked,” said the alumni of Thika HIGH SCHOOL

He says this is one of the most irritating question he keeps getting while transacting millions of shillings, especially with the old generation.
But where did he raise the Sh70 million? “The proceeds were raised from 169 apartments, which we constructed last year at Thika and sold at Sh2.5 million each. We raked in over Sh400 million,” said Mr Kamau. He said phase two of the project — where 250 units will be set up — is in the pipeline.

Mr Kamau attributes his success to having a stable family: “My wife, who was my client before I married her, has contributed immensely to the success of this firm. When I am faced with tricky business challenges she is always there to listen to me,” says Mr Kamau
Besides a strong family support, he says he has learnt that honesty is vital.

“If you say the size of the house is 100-square-feet, you must deliver that size because anything short of that is outright theft,” he said.
So what keeps him going?

“Doing a clean business. Without being honest, you won’t last long and this is what I strive to achieve every day. I value my customers and their feedback.”

His future plan is to develop his office block within the city. “Our monthly rent is Sh400,000 but this will be a thing of the past in the next two years as we shall put up our own office block,” he said.

The developer is targeting Thika, Kikuyu, Gitaru, Thindigua, Ruiru and Kajiado to put up housing units this year. As it seeks to cement its presence in the real estate sector, Dinara Developers has set its sight on listing in the Nairobi Securities Exchange by 2030.

House buyers at Dinara Developers are not required to pay any deposit and it is this unique business tactic that has seen the entrepreneur build an empire whose current estimate value is in excess of Sh1 billion.

“The dream of many people is to own a house but what they lack is deposit. At Dinara Developers, if we are constructing a house within 18 months or any period, we ask you to pay whatever amount within that period and this is what has attracted many customers.”

Surprisingly, Mr Kamau said that his company has never sought a bank loans.

“We plough back our profits. We have deliberately avoided bank loans because of the high interest rates, which will obviously be passed on to the customers. In the past two years we have earned very little as a company because huge chunk of Sh300 million profits we make per year is invested back in our projects,” he added.

The firm whose name means rich in Russia also owns a fleet of lorries, which transport building materials from its quarries, further cutting down the cost of construction.


Like other players, Dinara Developers is grappling with inadequate skilled manpower. The company started with three staff and now has employed 40.

However, its biggest challenge has been impromptu change of policies by corrupt county government officials.

“One day a county official tells you that your lorry should not carry more than 20 tonnes of stones beyond a certain point. The other issue is the re-zoning, which has disrupted our building plans, costing us millions of shillings,” he added.

The most unique hurdle, however, is the lack of trust from land owners, who dismiss him as a young person not worth conducting huge business.


Tuesday, June 30, 2015

How platform is offering small traders a hand up

Kaymu Kenya managing director Aleeda Fazal. She

Kaymu Kenya managing director Aleeda Fazal. She helps start-ups get online presence in turn boosting their sales volume. PHOTO | PHILIP MOMANYI |  NATION MEDIA GROUP

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Francis Mwangi is fast becoming a leading electronics retailer. Through online shopping website, Kaymu Kenya, the Biochemist student from the Technical University of Kenya, Nairobi, runs his Shamborina Electronics start-up.

“I ventured in June 2014 with OLX then I got registered with Kaymu in October, last year. But I started serious trading in January,” he said.
He has 77 listings of memory cards, Bluetooth devices and flash drive products.

With his primary customers being fellow students, Mr Mwangi, 23, makes an average of six sales per day from his goods whose prices range between Sh150 and Sh4,200. According to this month’s statistics, he has made Sh150,000 in sales.

The entrepreneur says that Kaymu has provided a reliable avenue that markets small-scale entrepreneurs, turning them into best sellers. He is expanding his portfolio by adding more items such as televisions and mobile phones.

“Kaymu provides a good platform to sell and mostly they promote a small business person. In fact, you do not need to have a lot of capital, you only need to be serious to start.”

Kaymu Kenya is an electronic commerce company providing local entrepreneurs with an opportunity of making profits.

According to Aleeda Fazal, the managing director, Kaymu symbolises the raw potential for business growth in Kenya.

“We have seen sellers that started with one listing and one order per week grow their online business into something that has become their full-time career, providing them with more household income than any previous employment. This is the power of Kaymu.”

“We went live in November 2014 and ever since we have seen a growth of 60 per cent every month up to date,” said Mr Steve Momanyi, head of seller management and logistics.

“We have one seller who started with three t-shirts and now he has over 150 listings,” he added.

It further offers both the buyer and the seller a seamless online environment to get in touch with one another.

Kaymu is a subsidiary of Africa Internet Group that has other affiliated companies in Kenya such as Jumia, hellofood, Lamudi, Jovago and Easytaxi. It is sponsored by mobile tech firms MTN, Rocket Internet and Tigo.

Globally it has presence in 33 countries, 17 from Africa such as Nigeria, Uganda and Tanzania. Kaymu Kenya has over 50,000 items on its site with the price ranging between Sh50 and Sh80,000.

Ms Nancy Nzisa also has a success story to share. The Strathmore University alumni started marketing her products in Facebook and Instagram in November, last year.


But in March, immediately after resigning from her accounting job, she accepted an invitation to Kaymu.

“I joined Kaymu in March after they told me they were in a position to expose me and build my portfolio,” she told Money.

Ms Nzisa, 24, who sells t-shirts and watches at between Sh250 and Sh1,000, makes approximately Sh20,000 in a month.

She said the site is connecting start-ups with the industry pioneers hence boosting their business. She has 54 listings in her online account — Watcheske.

Kaymu has laboured in creating a smooth, convenient and secure mode of transaction. Once an item is bought, both the buyer and the seller receive an email on order details such as contacts and order numbers so that they can communicate.

The company delivers goods in all parts of the country within one and four days. Once a buyer receives the product, the money is transferred to the seller commission free. Kaymu has its own payment system — Kaymu Safepay — which is an integration of M-Pesa and other card payment options in the market.

Interestingly, Kaymu Kenya’s customer-base is growing rapidly with most shoppers being male. They buy a lot of t-shirts, jeans and sneakers.

“It came to us as a surprise that men are the best shoppers because they are becoming fashionable. Women are also being trendy and are buying sport wear and jumpsuits since they are watching on their health,” Mr Momanyi said.

Faced with stiff competition, the company bets big on pricing by bundling items and consulting with the sellers to cut prices in order to encourage repeat shoppers hence more deals.

“We have deals of the day and of the week where we cut prices on items that are on high demand by bundling them,” Ms Barbara Kinyanjui, head of marketing and social media, said.

Mr George Guara, who runs Urbanai Trends is also earning well through Kaymu.

Mr Guara, an electronic engineering graduate from the Technical University of Kenya, has 90 listings of t-shirts that he sells between Sh600 and Sh900.

In a good month, he sells 50 to 100 t-shirts. The 26-year-old was introduced to Kaymu by his friend last year. He lauds the online platform for nurturing his business that has now seen him become an employer.


“I was a one-man show when I joined Kaymu. I have now employed three people to keep up with the orders and printing,” he said.

Electronic commerce has grown substantially since the 1980s to become the most convenient means of trading. The industry pioneers are giants Amazon, Ebay and Alibaba.

Kaymu’s managing director Aleeda Fazal added that businesses are just starting to realise the importance of online presence and the next natural step will be increased sales.

Despite increased sales, it has not been an easy ride for the top sellers. Mr Nzisa said that cut-throat competition, particularly when rivals slash prices pushes one to do so as well.
In addition to buyers occasionally rejecting their orders during delivery, Mr Mwangi said that not everyone has access to the Internet so they are also losing a lot of customers.


Tuesday, June 30, 2015

Visit that gave rise to e-payments firm

3G Direct Pay boss Eran Feinstein. SALATON NJAU

3G Direct Pay boss Eran Feinstein. SALATON NJAU | NATION MEDIA GROUP 

Eran Feinstein was invited to Kenya by a local airline to model an online payment and booking engine in 2006. He was however met by a myriad of challenges while trying to access online payment services for his purchases in Nairobi.

“Internet was not very good back then and that is when I saw a gap in the industry. People lacked a secure online payment to ease business transactions. I remember going back to Israel and telling my wife that I have decided to provide the solution in Kenya,” he said.

This gave rise to a business that nine years later boasts of presence in at least five countries in Africa. The Israeli national is the today the managing director of a payment processing services firm, 3G Direct Pay, which has presence in Kenya, Zambia, Tanzania, Uganda, Rwanda and Zanzibar.

“3G Direct Pay is an online payments processor for e-commerce, providing services to hundreds of travel businesses in East and Southern Africa,” said Mr Feinstein, who holds a degree in computer science and an MBA in marketing.

3G Direct Pay was launched with Sh9.8 million ($100,000) capital and by December 2006, the first deal on the platform was made. “I was however not sure it would pick after this. So we first worked from Israel,” he recalls.

The company has since relocated its offices to Nairobi and it plans to set foot in more countries in Africa with its cloud-based product.
“Our platform has a real-time payments processing engine. There are many layers in this system, one of the layers is the gateway which can connect to the system any mode of payment (cards, mobile etc). We also have another layer which does the fraud prevention and secures the system,” he said, adding that the system can process thousands of deals every second.

It serves about 38 airlines, 600 hotels, 500 travel agents and many e-commerce shops in Kenya, Tanzania, Uganda, Zanzibar, Zambia and Malawi currently.

“We guarantee safety in terms of bank details and all the information provided during these payments,” he says.

The cost incurred by merchants varies but the average cost for the airlines stands at about Sh19,678 ($200). For hotels is around Sh35,420 ($360), while on e-commerce shops the average is Sh9,839 ($100).

In Kenya, the firm has employed 18 people. It also has representatives across Africa in development management and marketing roles bringing the total number of workers to 30.

The firm also provides free seminars to merchants on its services.

Whenever a potential buyer encounters a product and the payments are made online, there is always anxiety that comes with keying in your bank details.

You do not know whether that information can be used to drain your account moments later. However, according to Mr Feinstein: “You need to check whether there is a lock sign on the URL. This signifies that the site is secure.” A Uniform Resource Locator is a reference to a resource on the Internet.

He also tells the buyers to check a firm’s physical address.

Mr Feinstein advises customers to always check the online platform they are interacting with to ensure that there is an option for cancellation or return of goods in case of anything.

Kenya has now come of age and according to Mr Feinstein, he has seen tremendous increase in subscriptions from merchants seeking online payment option.

“For me, East Africa is the place to be,” he adds.

3G Direct Pay was granted the Payment Card Industry (PCI 1) standard recently meaning it is secure and certified.

PCI is a set of requirements designed to ensure companies that process, store or transmit credit card information maintain a secure environment.

“They also check that we do not collect irrelevant information while processing the payments on our system,” he adds.

To get registered to 3G Direct Pay, a business only needs to send a message on its cloud–based platform and within two hours, the entity can start accepting online payments.


Monday, June 29, 2015

Survey helps mid-sized companies gain acceptance

Njoro Canning chairman T. K. Patel (right) and other investors during the launch of the Top 100 mid-sized companies survey at Merica Hotel in Nakuru on Friday. PHOTO | WANJIRU MACHARIA

Njoro Canning chairman T. K. Patel (right) and other investors during the launch of the Top 100 mid-sized companies survey at Merica Hotel in Nakuru on June 26, 2015. PHOTO | WANJIRU MACHARIA 

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Mid-sized companies that participate in the annual top 100 survey have tremendously gained acceptance because the study is a major brand booster, Nakuru County Governor Kinuthia Mbugua has said.

Speaking during the official launch of the survey at a Nakuru hotel on Friday, Mr Mbugua said local firms that have taken part in the survey are among the fastest-growing in Kenya.

The survey will be carried out in six counties, with the last being held in Nairobi before the end of the year, where winners will be announced.
The initiative, which is now in its eighth year, is sponsored by the Business Daily and KPMG, and targets fast-growing mid–sized companies with an annual turnover of between Sh70 million and Sh1 billion.

“KPMG and Nation Media Group stand for integrity and fairness in business practices and are keen to see companies that participate in the survey commit themselves to conduct their business in an ethical manner. I encourage companies in Nakuru to participate in the survey and compete against other players in the industry,” said Mr Mbugua.

He said the results of the survey were critical to policy makers in both county and national governments, non-governmental organisations, private firms, equity ventures, investment institutions and other lenders.


Four companies from Nakuru — Mega Pack Limited, Care Chemist, Supreme Pharmacy and Hotel Waterbuck — shrugged the stiff competition and carried the flag for the county in the final survey held in Nairobi last year.

“We had very few customers but the moment our standards of processing were benchmarked in this survey and the name of our company appeared among the top 100 mid–sized companies, our customers and suppliers developed more confidence in us and the volume of our business has since increased tremendously,” Nakuru Mega Pack General Manager Amitangush Chakraborty said.

The company, which was started in 2010, has since increased its production from 100 tonnes to 1,200 tonnes per month of packaging materials, and is giving established big boys a good run for their money.


Thursday, June 4, 2015

NSE in bear run, hold Safaricom

The current bear run at the market has two sides to it: “On one hand, we have stocks, which are not exciting investors despite news that would otherwise propel their share price upwards, on the other, we have an opportunity for value medium to long-term investors to take position as the bargained shares persist. PHOTO | FILE

The current bear run at the market has two sides to it: “On one hand, we have stocks, which are not exciting investors despite news that would otherwise propel their share price upwards, on the other, we have an opportunity for value medium to long-term investors to take position as the bargained shares persist. PHOTO | FILE 

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NSE: The Nairobi Securities Exchange has been on a bear trend in the past week.

In fact, since the beginning of the year, the NSE 20-Share Index has lost a collective 5.5 per cent to 4,835.75 points in contrast to the 5,117.43 points recorded in January.

According to the head of Investax Capital Ndindi Nyoro, the current bear position at the market has two sides to it: “On one hand, we have stocks such as Equity Bank, which are not exciting investors despite news that would otherwise propel their share price upwards such as the buy-out of a bank in DR Congo,” he says.

“On the other, we have an opportunity for value medium to long-term investors to take position as the bargained shares persist.”

SAFARICOM: Last week, Safaricom dropped from Sh17 to a low of Sh15 per share. On Friday, though, the counter pulled itself from the woodworks, rallying to Sh16.15 apiece.

Within the week, the telco recorded major volumes that on Wednesday’s trading stood at 64 million. Ironically, at some point during the day’s trading, the counter experienced zero demand. Three hours into trading on Friday, Safaricom moved 30 million shares.

According to Kevin Tuitoek, a research analyst at Genghis Capital, Safaricom has witnessed increased foreign participation. “A price increment was expected after the record Sh32 billion profit. However, this has been countered by exit of foreign investors and muted demand from local ones,” he notes, adding that the dip could have been as a result of investors waiting to see how far the counter could fall.

“This drop is temporary. The counter is intact in value and remains a good investment. It provided vantage points for investors and it will prop up towards the highs of Sh17.”

Mr Tuitoek is nonetheless quick to note that the rise will also be determined by the performance of the overall market. 

FLAME TREE: This stock has been a prominent in both the gainers and losers pack in the past week. According to Mr Tuitoek, the stock is still in the price discovery position.

“The rise and fall has largely depended on investor sentiments regarding its position after the acquisition of four food and snack brands from Chirac,” he says. On Friday, for instance, the counter opened at Sh8.70 per share from Thursday’s closing price of Sh8.15 and rose to a high of Sh8.90 per share.

“The uptake of the stock, though, could be positive based on the success of its diversification and expansion,” notes Mr Tuitoek. 

KENYA AIRWAYS: On Thursday, Kenya Airways received a Sh4.2 billion loan from the Treasury to help it ease its financial woes. However, according to Mr Nyoro, the bailout is a case of too little too late. “The company is struggling with debts spanning close to a billion dollars, turning the Sh4.2 billion loan into a drop in the ocean on one hand and increasing its debt burden on the other,” he says. “It’s not a share worth taking a position.”

Currently, the national carrier is expecting to make a loss of not less than 25 per cent of its previous year ended March 2014, in which it posted a net loss of Sh7.8 billion and loss per share of Sh6.35. Its results are due for release not later than next month. On Friday, the counter opened at Sh7.15 after closing at Sh7.15 the previous day. Over the past one year, the national carrier has traded at a low of Sh6.40 per share and a high of Sh12.60.


Thursday, June 4, 2015

Hurdles women in business face

Although entrepreneurship is no easy path for everyone, some challenges are unique to women. The life of a businesswoman takes on a few different challenges to that of a businessman. PHOTO | FILE

The right business idea often comes from an activity that an individual is passionate about, that also has commercial viability. PHOTO | FILE 

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What challenges do you face as a woman in business?

Although entrepreneurship is no easy path for everyone, some challenges are unique to women. The life of a businesswoman takes on a few different challenges to that of a businessman. I speak from experience. The point is just to create an understanding of some of these issues and perhaps get both men and women to understand.

I have met men who know how to “toot their own horn”. I have even tried to calm down some men as they sounded boastful, my husband included! But, hey this is how men make their presence felt.

Speaking about your accomplishments is a necessity for a successful entrepreneur. Many women feel uncomfortable speaking about their triumphs. Your achievements are some of the biggest selling points, so don’t be afraid to put them out there. You need to train yourself how to do this.


Fellow women, we wear many hats. From business owner, to mother, wife, daughter, girlfriend, member of the church, good neighbour, chama member... you name it.

Women have a tendency to be everything to everyone and juggling everything becomes very difficult. Out of all these hats, some tasks can be delegated. If you try and delegate some of the business tasks, you can run a successful venture. Be sure to delegate correctly so that you are not exposed to sabotage.

I think that delegation is especially difficult when women have to take long leaves such as maternity. If you leave your business in the hands of untrustworthy people, you will face numerous challenges.

I have seen a case where a woman went for her honeymoon only to find that her co-directors had edged her out of the business.

There is a very feminine tendency that is common across almost all women folk. Females are often taught to “be nice” and “people pleasers”, which can lead to seeking the approval of others. Subsequently, women can have a harder time saying “no”, which can lead to undercharging for their products/services.

Some males also find women too hard when they say “no” and may take an offence. It is a delicate balancing act for women but this typically comes at the expense of their own needs, business or otherwise.

You must train yourself not to become a victim of your own goodness. I have seen people try to get me to accept to do work at a lower price or even no additional cost while I know they would not do the same were it the case of a man. I have put this to test by going with a man to negotiations and allowed them to take the lead.

I was shocked at how well the other parties settled on the same thing I had previously proposed. Its strange but true. As a woman in business, you have to be tactful and not afraid to stick to business rather than “be nice”.


Have you been letting fear stand in your way? Your gut tells you to go for it but you quickly let your own mind cheat you that this business or that business is not for you. In general, women can be less prone to taking risks and can let their own fears such as the fear of failure, fear of success, fear of being on their own etc stand in the way of pursuing the path to success.

Try to build confidence by making sure you are mentally prepared. Then make sure you have a checklist of the critical things that need to be in place for your business to function well. Start with what you have. You will learn a lot along the way.

Take the lessons with you and you will be surprised how growth will flow.

Overall, believe in yourself, efforts and capabilities. Along the way, you many find a few people not taking you seriously. From those you expect to be your first cheerleaders to people you should not even care what they think. Some people within the business world may not take women opinions and advice as “expert opinion” compared to a man’s. Seek support that can help you overcome this bias. Like tennis star Serena Williams once said “I’ve had to learn to fight all my life got to learn to keep smiling. If you smile, things will work out.”

Keep the focus while smiling.


Thursday, June 4, 2015

The banks to avoid when you are seeking loans

Annual percentage rate (APR) and a standard pricing mechanism — Kenya Banks Reference Rate (KBRR). APR combines all charges levied to secure a loan, negotiation fees, monthly charges, interest, commission and insurance to a single comparable rate making it possible to compare rates from the banks. PHOTO | FILE

Annual percentage rate (APR) and a standard pricing mechanism — Kenya Banks Reference Rate (KBRR). APR combines all charges levied to secure a loan, negotiation fees, monthly charges, interest, commission and insurance to a single comparable rate making it possible to compare rates from the banks. PHOTO | FILE 

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Editors note:

This version corrects errors on an earlier story, which were attributable to Central Bank of Kenya who authored the data but later changed to new rates after lenders’ complaints. You can find all the bank’s correct loan pricing as at 31 March, 2015 at www.centralbank.go.ke.

Also note that in Kenya, there are two different and separate entities by the names Habib Bank AG Zurich and Habib Bank Ltd. The content in this article refers to Habib Bank Ltd.


For the longest, banks in Kenya have been fleecing borrowers with little or no information on how expensive or cheap the money they are borrowing is.

This has, however, changed with the introduction of annual percentage rate (APR) and a standard pricing mechanism Kenya Banks Reference Rate (KBRR). APR combines all charges levied to secure a loan, negotiation fees, monthly charges, interest, commission and insurance to a single comparable rate making it possible to compare rates from the banks.

According to the Central Bank, the KBRR would be the uniform base lending rate across the banking sector and would enable consumers compare the pricing of loans at various lenders.

KBRR was set at 9.13 per cent but has since fallen to 8.54 per cent. There is expectation is that this rate could change in today’s Monetary Policy Meeting as Central Bank weighs in to prop the shilling.

Money lets you know where to seek a cheap loan. Some banks are still offering credit at highly expensive rates while others are yet to shift loans to the KBRR platform.

For instance, according to a report released last week by CBK exposing the credit pricing of local lenders, Diamond Trust Bank, Faulu Microfinance Bank and SMEP Microfinance Bank were yet to convert to the KBRR loan pricing framework as of March 31, 2015.


According to the CBK report, K-Rep Bank is the most expensive lender in Kenya. On the cheaper side, Bank of India and NIC Bank are the overall cheapest lenders.

Well, today, Money breaks down the list by CBK on credit pricing to help you spot the lenders where loans are going for an arm and a leg:

Consumer loans, micro loans, and business loans secured with property, K-Rep Bank is offering micro-loans at 27.46 per cent, and consumer loans and business loans secured with property at 24.41 per cent respectively with a maturity of between 1 and 5 years.

Trans-National Bank features prominently in the expensive category, with loans going for 26.31 per cent with a maturity of 1 to 2 years and 25.5 per cent with a maturity of over 2 years for consumer loans, and 24 per cent for micro-loans. Habib Bank Limited has priced consumer loan at 17.13 per cent and business at 17.41.

Among the microfinance institutions, U&I Microfinance Bank is selling consumer loans at 21.33 per cent while Remu Microfinance Bank is charging 20 per cent.

For micro-loans, U&I Microfinance Bank stands out again with its loans going at 22 per cent. Rafiki Micro Finance is in this boat too with micro-loans going at 21.91 per cent.

In sharp contrast, at Paramount Universal Bank, consumer loans are going at 9.5 per cent. Bank of India is charging 12.17 per cent while at African Banking Corporation, the loans are going at 12.5 per cent. Dubai bank is charging consumer loans at 12.91 per cent.

For consumer loans with a maturity period of over two years, Dubai Bank, Family Bank and National Bank are the cheapest at 12.91 per cent, 14.62 per cent and 14.71 per cent respectively.

For business loans with a maximum repayment period of five years, Standard Chartered leads the pack with 13.9 per cent for credit repayment spanning over 5 years. National Bank is charging 15.58 per cent for similar credit.

SME, asset finance loans

Equatorial Commercial Bank and First Community Bank are offering SME loans at 20.75 per cent and 20.69 per cent respectively. Small businesses are getting loans from Remu Microfinance and EcoBank Kenya at 20 per cent and 20.77 per cent respectively.

This is in contrast to the 14.63 per cent, 14.81 per cent, being offered at African Banking Corporation, and Commercial bank of Africa.

In the asset finance segment, Uwezo Microfinance is alarmingly expensive at 30.25 per cent, followed by EcoBank and Barclays Bank at 21.5 per cent and 21.41 per cent respectively. On the cheap side, Equity Bank and Trans National Bank are the fairest at 10 per cent, followed by Rafiki Microfinance at 12.64 per cent, African Banking Corporation at 13 per cent, and KCB at 13.85 per cent.

Personal residential mortgage and commercial mortgage

Rafiki Microfinance has been ranked as the most expensive at 20.41 per cent for individuals seeking mortgages. Rafiki isn’t alone in this bracket. Gulf African Bank is charging home hunters 17.74 per cent while home loans at Consolidated Bank are going at 18.41 per cent.

On the other end of the rope, NIC Bank is the cheapest at 10.95 per cent, Family Bank comes close at 12.49 per cent while Barclays Bank is charging 13.31 per cent.

For commercial mortgages, Bank of Africa is the most expensive at 18.79 per cent, followed by NIC Bank and Rafiki Microfinance at 18.41 per cent, First Community at 18.19 per cent, and Housing Finance at 18 per cent. Giro Commercial Bank is the cheapest at 15 per cent, followed by KCB at 15.46 per cent.


For businesses, overdrafts are most expensive at K-Rep Bank. The bank is charging a rate of 24.41 per cent. It is closely followed by Standard Chartered Bank at 24 per cent and Jamii Bora Bank at 20.41 per cent.

Overdrafts are cheapest at Paramount Universal Bank where they are charged at 14 per cent, Commercial Bank of Africa at 14.58 per cent, Equatorial Commercial bank at 15 per cent and NIC Bank at 15.08 per cent.

The big banks

KCB: The lender is charging an interest of 16.71 per cent for its consumer (personal) loans, 18.71 per cent for business loans secured with property, 13.85 per cent for its asset finance loans, 15.71 per cent for overdrafts, 14.16 per cent for personal residential mortgage, 15.46 per cent for commercial mortgage, 18.71 per cent for SME loans, and 15.71 per cent for its corporate loans.

Equity Bank: Consumer loans at Equity Bank are being charged at 16.5 per cent, business loans at 19 per cent and 18 per cent for loan repayments of up to five years and repayments going past five years respectively. Asset finance is going for 10 per cent, SME loans at 17.5 per cent, personal mortgages at 17 per cent, and overdrafts at 19 per cent.

Standard Chartered: StanChart has set the cost of consumer loans at 19.4 per cent, with business loans guaranteed with property for a period exceeding five years selling at 13.9 per cent. Personal mortgages are going for 13.9 per cent while SME loans are being charged at a rate of 16 per cent.

Co-op Bank: Business loans secured with property are selling at 20.32 per cent, personal mortgages at 14.01 per cent and asset finance loans are going for 15.43 per cent.

Barclays Bank: Consumer loans are most expensive at Barclays Bank among the big banks. They are going for 19.86 per cent. Asset finance loans are being charged at 21.41 per cent while personal mortgages are set at 13.31 per cent.

Family Bank: Consumer loans are selling at 15 per cent for a period of less than two years and 14.62 per cent for a period of over two years. Asset financing has been placed at 16.71 per cent, personal mortgages at 12.49 per cent and SME loans at 17.76 per cent.


Thursday, June 4, 2015

How brothers turned coffee farm into high-end market

Village market's Managing Director, Hamed Ehsani. PHOTO | FILE

Village market's Managing Director, Hamed Ehsani. PHOTO | FILE 

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On what was once a coffee farm now stands a high-end shopping centre in Nairobi.

Armed with Sh90 million in 1992, the Ehsami brothers, bought land and started setting up shops. Their dream was to build an African market centre, where people would meet and shop.

Twenty years down the line, however, the brothers’ idea of setting up between 10 and 30 shops as well as a supermarket has turned out to host over 200 shops and the Tribe Hotel.

Money met with one of the brothers Hamed Ehsani, who said the growing business has been sustained by the primary focus of simply creating a ‘village market.’

“We were just driving around when my brothers and I saw this place and thought we could set up a few shops and create a shopping centre that captures the concept of an African village, a market that brings people together and creates a setting for socioeconomic interrelations. We bought the seven-acre piece of land that was full of coffee bushes. My elder brother designed it and three years later, we had 60 shops,” said Mr Ehsani.

And for the three brothers — Abbas, the eldest, Mehraz an architect, and Hamed, the youngest — unity has seen them weather the storm in steering the enterprise.

The Sh12 billion worth of shopping complex is now expanding. It is developing 75 new shops, a supermarket, and a hotel with a capacity of 215 rooms as well as a conference centre. The plan also includes 1,000 new parking spaces set to be completed next year.


The brothers strategised well to get customers back in the day when Gigiri was considered far away from the city.

A 12-lane bowling alley, a Nu-Metro cinema hall, nine hi-tide waterslides among other recreational facilities made the entertainment aspect of Village Market attractive.

Gigiri, as a location, turned to be a favour as well. Many diplomatic residences and the United Nations offices around it made the mall a preferred shopping centre for foreign dignitaries, whose taste is premium. Mr Hamed says they have kept abreast with changing shopping trends as another investor, the Shah family, joined them as partners. “Trends in shopping have changed because Kenyans travel and are exposed to modern shopping concepts. We had to keep up with the expectations of our customers, which played an important role in creating our expansion from the original 60 to over 200 shops we have today,” says the Village Market boss.

Surprisingly, he says, ongoing tourism slump has not affected the hotel business since Tribe attracts business travellers.

Mr Ehsami is, however, concerned that insecurity has the potential of affecting mall business. According to him, the government has a lot to do to protect investments.

“We have invested heavily in securing the Village Market. The market is very rumour sensitive though. An SMS or a social media post is enough to scare away shoppers and reduce traffic. I hope the government will find a long lasting solution to these threats,” he told Money.

Asked whether they have achieved the vision to create a village market, the youngest of the Ehsani trio says the village has lived to its true spirit of providing a one-stop-shop that brings different people to exchange ideas; just like in an African market set up.

He is not worried by many malls coming up in the neighbourhood to challenge the Village Market’s position, saying that is just a sign that Kenya will soon become a shopping destination.

“We have responded to the needs of the city residents and developed what is modern and all inclusive. Our Sh5.6 billion expansion plan will double the size of Village Market to over 500,000-square-feet of shopping space. Demand is high and we undertake due diligence before we accept applicants for business premises,” the soft spoken trader said.


The entrepreneur believes that Kenya has the potential to take advantage of the current global and regional market trends to take off.

“There are some very easy ways for Kenya to get a lot of investments. Europe is still depressed. Russia has issues with Ukraine. South Africa, with its Xenophobia attacks, has scared people. North Africa is yet to recover from the Arab spring while West Africa is yet to fully recover from the Ebola scare. This leaves East Africa as the destination of choice and Kenya is the best place,” he said.

He believes the government should also ensure that there are easier steps in enabling one to start a new business as well as strengthen integrity of records, especially on land with a view to making it fool proof. This would see investors feel secure.

His greatest joy, he says, is seeing shoppers, who were introduced to the Village Market as teenagers come to visit with their children. He says the longer the business stays; the longer it attracts customers, who pass loyalty to their children.

His take on wrangles that characterise family businesses in Kenya today?

“The most important thing, in my opinion is respect that you must show to your family members and partners. The other thing is to put the interest of the business ahead of the interest of the individuals. And finally to consult on all matters to make sure everyone supports the ideas and the actions. That way, everything will work smoothly,’’ advised Mr Ehsani.

The Village Market, which hosts over 300 events each year usually has its busiest days being the religious holidays of both for the Muslims and Christians. The centre has also played scene to documentaries on business, recreation and entertainment.


Thursday, June 4, 2015

Salon before breakfast is brisk business

Clients get their nails done at Urban Hair studio located at Barclays Plaza, Nairobi County on May 29, 2015. PHOTO | JEFF ANGOTE

Clients get their nails done at Urban Hair studio located at Barclays Plaza, Nairobi County on May 29, 2015. PHOTO | JEFF ANGOTE 

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Salon before breakfast? It’s not everyone’s cup of tea but for Urban Hair Studio located on Barclays Plaza, Loita Street, it is one of its best plans yet. At 6.30am the parlour is a beehive of activity.

At the reception is vase of fresh flowers, a staff serves customers a choice of tea or juice. Shampoo girls busy at the sink scrub and massage scalps while stylists arrange hair to ones’ liking. At another table, a beautician makes a bold stroke of colour on a customer nails. Many customers here are young professional women putting a beautiful start to their day.

Services range from hair treatment, retouches to manicures. Men can get haircuts, colour and have their dreadlocks and natural hair coloured and styled.

The head stylist, Mr Patrick Muikamba, said the whole idea started with a busy customer. “This client told me she had a busy weekend outside Nairobi and had an early morning presentation to her company’s top executives and she needed to look her best. She requested to come in at six o’clock in the morning,” he told Money.

He agreed but he thought he could face idle mornings. To his surprise, however, customers kept coming, all expressing delight that the salon was open so early. Some even chided him for not informing them earlier.

Most said they were in town early to avoid traffic jam and being in the salon was a good use of their time.


“We discovered we were on to something and decided to have at least half our staff come in early.”

The weekday morning sessions are popular with their regular clientele, who make reservations based on their schedule.

“In the beginning, we saw people preparing for interviews and important presentations coming in early, but now clients just come in, just to look good and boost their confidence,” he said.

This development has compelled them to add to their range of services. The natural hair trend is big and they now have a stylist, whose job it is to create different looks for natural hair.

Saul Juma, a stylist at the parlour noted that while natural hair can be done at home, a salon touch makes it neat and keeps the style for longer.

Mr Muikamba says the salon offers premium services at reasonable rates. “Our clients prefer personalised services. For them being in the salon on the weekend with everyone else just won’t do. So this is their time where they feel they’ve received undivided attention,” he said.

While Urban Studio offers a wide range of services, hair remains its core business.

“We take hair very seriously and we use only the best products. We keep abreast of developments in technology and invest in products and equipment that help us provide unmatched services. We want our clients’ hair to be their crowning glory and be our best advertisement.”

The salon’s flagship product is Mizani by L’oreal, which they import from the US. They are keen on how they dispose the containers to avoid the packaging from falling in the hands of counterfeiters.

“We opted to import our products to ensure we maintain consistent standards. This also helped us build relationships and we participate in trainings that make us better at our job. We also give feedback to them on how they can improve the product to suit our customers here. We also get new products first before everyone else,” he said.


The salon offers gel manicures, which are chip resistant and offer long wear of up to a month making them an ideal choice for the busy career women, who have little time to spend in the salon.

The charges vary depending on the services offered. Treatments start from Sh2,000 to Sh6,000. A retouch would set you back Sh4,000.

The salon opens from 6am to 7pm. It offers free parking in an adjacent parking lot.

Mr Edwin Wandera, the head stylist for men noted that men have not been keen on the morning rush, instead preferring the mid-morning to late afternoon hours.

Urban Hair Studio, which now has a staff of 30: six stylists, six shampoo assistants, six braiders, eight beauticians, two receptionists and four support employees plans to open franchises in the city neighbourhoods.


Thursday, June 4, 2015

Six habits of  unstoppable business owners

Being an entrepreneur isn’t easy. It requires the kinds of habits that most people simply don’t have, along with a discipline, passion and dedication that are unmatched among non-business owners. And while every entrepreneur is different, we all have a lot in common, including many of the same habits. GRAPHIC | FILE

Being an entrepreneur isn’t easy. It requires the kinds of habits that most people simply don’t have, along with a discipline, passion and dedication that are unmatched among non-business owners. And while every entrepreneur is different, we all have a lot in common, including many of the same habits. GRAPHIC | FILE 

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Being an entrepreneur isn’t easy. It requires the kinds of habits that most people simply don’t have, along with a discipline, passion and dedication that are unmatched among non-business owners.

And while every entrepreneur is different, we all have a lot in common, including many of the same habits.

Here are six behaviours shared by unstoppable entrepreneurs:

1. Planning

In business, it’s easy to let other people’s priorities run your day. Phone calls, emails, appointments, meetings, it never ends. Unstoppable entrepreneurs plan their day in advance, before the mayhem begins. But they don’t just make any old plan, they make sure to block out time for their most important priorities.

2. Nutrition and exercise

This simply can’t be overstated. Being a productive, unstoppable entrepreneur is about your body just as much as your mind and will.

If you don’t take care of your nutrition and daily exercise, you aren’t going to be at your best and you definitely won’t be unstoppable.

Drink a lot of water, eat breakfast and get your body moving. You’ll be much more successful as a result.

3. They serve

Those who focus only on their own success are the ones who don’t succeed at all. To be effective as a business owner, you need to serve your customers.

That might come through in the way your products make their lives easier or the way your customer service efforts delight them. Whatever the case may be, setting service as one of your top priorities is a sure-fire way to become unstoppable.

4. Setting goals

Every unstoppable entrepreneur has clear goals. Knowing your goals will keep you going when things get tough and give you something to focus on when you’re not sure what to do next.

But your goals shouldn’t just focus on the long-term. Have long-term, mid-term and short-term goals. Doing so allows you to plan your days and weeks with unmatched focus, knowing exactly what you’re shooting for.

5.Taking calculated risks

People have an image of entrepreneurs as those who take risks just for fun. But while the risks we take may be crazy to those without an entrepreneurial mind, in reality, they’re calculated.

Or, at least, they should be. If you’re the type of business owner who jumps in without knowing the numbers and probabilities behind your course of action, you won’t last long. 

6. They know their strengths, weaknesses

Successful business owners are honest with themselves. They know their own strengths and weaknesses, and take them into account with every business decision.

It takes humility to really examine yourself this way, but it will pay great dividends when you know exactly who to hire, who to partner with and what skills you can offer.

7. They hire A-team

Entrepreneurs that don’t succeed are often those who are afraid to have A-team players.

They either feel threatened or they won’t offer the incentives needed to hire the best. Either way, they lose. To be an unstoppable entrepreneur, you’ve got to hire the best.

Focus on those who fill in whatever gaps you currently have. Doing so will help you create the amazing team that’s needed for success.

8. They learn

Unstoppable entrepreneurs know that they don’t know it all. As a result, they never stop learning.

Never get so busy that you stop investing in yourself and your knowledge of business, your industry and new technology.

Staying up to date is essential if you want to succeed.


Friday, May 29, 2015

Cages: Ideal system for poultry farmer with small space

Mr Raphael Kirui, the farm manager, collects

Mr Raphael Kirui, the farm manager, collects eggs from the trays of the caged chicken at Reuben Chirchir’s poultry farm at Chebang’ang in Bomet County, and packs them ready for transportation. ANITA CHEPKOECH |  NATION MEDIA GROUP

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The rows upon rows of red-to-tan birds furiously peck their marsh dishes, creating a symphony which is only disrupted, now and again, by a cacophony of clucking.

The birds occasionally tilt a small metallic knob above the feeding trough using their reddish-brown beaks and water trickles from the pipes into a small dish.  Water only trickles when the knob is touched and the birds have learnt so.

It is a hot afternoon and workers are seen collecting eggs with minimal disturbance to the hens. The floor of the cages is slightly inclined, with narrow vertical opening at the front side such that when the hens lay eggs on the floor of the cages, they roll out and only stop at a raised end.

Welcome to Reuben Chirchir’s poultry empire, which he has been building for the last three and-a-half years.

He is now uprooting a section of tea bushes at his Chebang’ang, Bomet County home to create way for a lorry that will be collecting eggs at his chicken farm gate.

“Egg production from my 8,600 chickens has doubled since I moved them from deep litter to the caging system,” Chirchir, an accountant at a government institution, says.

The birds are kept in twos inside each cube of long running cages arranged in rows. Each of the ladder-like cages holds a total of 120 chickens in lower, middle and upper storeys.

Eggs are collected after feeding in the morning and in the evening.

Chirchir and his three workers collect 128 trays that carry 30 eggs each daily, which amounts to an average of 3,500 in total, which are supplied to hotels in various destinations using a family pick-up.

Every Friday, about 800 trays are transported to Nairobi, 200 trays to Litein on Wednesdays while 350 trays are sent to Narok on Mondays.
Though the operations at the farm may now seem perfect, Chirchir says it was not always easy.

He began rearing chickens in August 2012. “As an entrepreneur, I dared to buy 2,000 chicks, despite having no experience in the industry,” Chirchir told us.
The high cost of feeds, getting committed and trained personnel are some of the challenges he has braved.


“Many people lack expertise to manage large numbers of delicate chicks. I engaged an expert from Parksons Agrovet in Kericho, who gave me the basics of caring for the chicks and was very supportive in the subsequent journey,” he says.

Then his chicken fell victim to diarrhoea and loss of feathers, making them less productive. He spent a lot of money on treatment.

After an extensive reading of books and research on the internet, the beleaguered farmer learnt of the caging system which is preferred because it is hygienic, comfortable and safe to birds. It is also efficient as it is cheaper and takes a high number of birds in a little space.

Armed with a bank loan and savings, he made an initial order of 42 cages from China last October, which were delivered two months later.

“When I saw the prices, I knew it was not easy but I was passionate to adopt the system. It cost me Sh40,000 to buy and ship each cage,” says the 41-year-old farmer.

Another problem arose when the cages arrived with manuals written in Chinese, making it difficult to assemble the parts.

“We did a lot of trial and error with a local fundi but the design would not come together well. I called in different people, all in vain,” he said.
It was only when they followed the pictorials that they managed to install them.

In March this year, another 84 cages were brought in, bringing the total to 126.
He says the management of cages was much easier than the deep litter system, which he says exposes chicken to disease.

Instead of using water troughs that can be unhygienic, water is supplied by automatic pumps that only allow water to trickle down when pecked by chickens.

“I can easily account for every chicken and know which one is laying eggs so that those that have stopped laying are sold off,” he said.
High standards of hygiene are maintained at the farm. The gates are locked and visitors have to disinfect their feet before entering the poultry grounds while the houses are disinfected every month.


Chicken are vaccinated from when they are young and therefore are free from many diseases.

According to David Rotich, an animal health technician and artificial insemination expert for Parksons Agrovet in Kericho, the deep litter system is unsuitable because it exposes birds to itchiness that de-feathers them and coccidiosis that causes diarhoea.

De-feathering, he explained, is as a result of small mites that hide in the dusty floors of the deep litter systems and feed on chicken at night.

“The chicken will scratch and end up losing feathers. But the worst is coccidiosis, where waste comes out with blood stains. It affects the feeding system of chicken and lowers the production of eggs,” Rotich said.

He said cages also reduce cannibalism and increase productivity.

Chirchir said he chose to keep Rhode Island breed because they lay eggs longer and do not grow old early.

To ensure continuity, the farm brings in 1,000 chicks every month.

“I am targeting 21,000 chickens by the end of the year. That is why I am making way for the lorry because after the increase, the eggs will no longer fit into the pick-up,” he said.

Currently, his chickens feed on 14 bags of 50kg marsh every day, with each going for Sh2,300.
An attempt by Chirchir to use mixers to prepare his own feed and cut costs proved disastrous when workers failed to produce the right ratio of feeds for the chickens which led to reduced production of eggs by 30 per cent.

They were to strictly measure various amounts of a total of 14 ingredients, among them lysine (6kgs) and lime cement (20.8 kgs) both for egg-shell hardening, bone meal (6kgs), cotton cake (3.8 kgs) maize meal (78 kgs) and wheat pollard (28.6kgs).

“With the kind of set up in cages, we don’t need a lot of staff. However, two interns from Egerton University will report to the farm next week for two months,” said Chirchir.

The cage system has helped Mr Chirchir take up more birds than would have been possible under the deep litter system.

“With my half-acre, I would have kept a maximum of 2,000 chicken. Now I have four times that in the same space.

Sophie Miyumo, a poultry scientist with a smallholder indigenous chicken improvement programme, says the cage system is economical because some cubes extend upwards, allowing more room for birds.

“It is recommended that the deep litter system takes up four to six birds per metre square whereas in caging, each cube takes up a maximum of four birds, providing floor area of 450 to 525 square centimetres per bird.  This makes it ideal for urban areas where land is scarce. “ says Sophie.

The Egerton University lecturers, however, advise that caging is more suitable for layers, and not broilers or indigenous chicken which tend to grow too big for the cubicles in the cages.


Friday, May 29, 2015

Just like you, your dairy cow needs a quality mattress too

Unless ingenious and urgent measures are

Unless ingenious and urgent measures are employed to address the myriad challenges facing the livestock sector, in particularly high cost of feeds, farmers will continue to get low returns. FILE | NATION 

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Farmers who have used the cow mattresses have realised an increase in milk volume from their animals. It is provides comfort and dry bedding that enhances hygiene standards in the cowsheds thereby controlling cases of mastitis infection.

Use of the cow mattress will save you money from losses related to mastitis infection.

It is more effective than the twigs, coarse sand, dried manure or saw dust. Such bedding materials do decompose, especially when cows urinate or dung on them, creating conditions that are not comfortable any more for the animals.

During decomposition, which may not be easily noted by the farmer, these materials allow for multiplication of harmful bacteria that later cause infection to the animals.

Proper mattresses are easier to maintain since they are easy to clean and disinfect. If cows lie on them, they feel encouraged to stand during defecation and urination, making them clean at all times. These maintain the high standards of hygiene required in your cowsheds.

They also offer long term comfort, giving cows maximum time for resting and relaxing; time that allows them to undergo natural body processes such as increased blood supply to the teats and the udder. This guarantees a higher milk yield and healthier animals that increase farmers’ profits.

The mattresses also protect the cows from physical injuries caused by rugged resting floors. This is a step ahead in saving you money from treating the animal.

Farmers do spend more on repeated inseminations resulting from poor heat detection; but with the cow mattresses, the cows feel secure hence show clearer strong heat signs.

This allows the farmer do proper timing of insemination and save on repeated insemination costs.

The soft nature of the mattresses allows them to absorb pressure, especially from the front knees and hocks of the cows during lying down and rising.


This, again, reduces chances of lameness in cows or getting injury-related stress. The healthy productive cows also remain long in the herd as premature culling is assured.

Increasing milk production is the desire of every dairy farmer as well as prevention of deadly diseases like mastitis, an infection of the mammary glands and udder tissue caused by poor housing, among other factors.

To earn more profits, farmers have put into practice every approach that can help them raise the yields of their cows. Now, farmers have a reason to smile because of the new cow mattresses; a technology borrowed from the developed countries, which comes as a major boost towards increasing milk production.

It works!

Cows, just like humans, give more if treated well. Treating your cows well does not necessarily mean you have to be an animal scientist professional for things to work right, it is simply being passionate in your dairy farming and learning from successful dairy farms to know what your animals require.

Many farmers have wondered how cow mattresses look like. They are mostly black in colour and are made from remains of rubber tyres, high quality enough to sustain your animal for long before replacing.

The recycled tires are treated with anti-fungal and anti-bacterial solutions that make them safe for the animals. They have a special texture pattern that ensures cows do not slip or fall, even when wet.

The mattresses are of varying thickness sizes, the most common ones being the 2-inch and the 4-inch thick sizes. Each mature cow should have her own mattress while the calves’ have theirs which are specifically designed for them and can be shared.

There are also mattresses made uniquely for other livestock like goats, sheep and even dogs. 

They can be sourced from Menengai Agrovet in Nakuru and from the DeLaval Dairy Equipment Supplies.

With cow mattresses in your farm, you guarantee inexhaustible benefits to and from the animals; therefore, farmers have all the reasons to use them. When you invest in them, you enjoy your night while your cows also sleep safe and comfortably as you wait for more milk the following morning. All these translate to increased productivityf rom the cows and more profits to the farmer.

The writer works at the Department of Animal Sciences, Egerton University


Friday, May 29, 2015

Our chama farming project is swept away by raging floods


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My reputation as a sane mind in matters of farming is in serious jeopardy. The recent floods are to blame. A friendship that started many years ago when I was in secondary school is on the brink of collapse.

It involves my former school mates, people I believe I am connected to by a very tight cord due to the many challenges we encountered and endured together as schoolmates.

It all started early last year. Gerrishom, the most techno-savvy of my schoolmates, created a WhatsApp group for us to chat away all our fond memories. But after the membership hit 50, Kirika, a serious guy who scored a Grade B and beat all of us, thought we needed not just to chat away all the historical injustices we faced at our school.

“Can’t we do some venture, an economic one to be precise. We have some valuable  synergy….,” He posted one evening. The responses were overwhelming. It is like everybody was waiting for this. Ideas started flowing in.

Kagema proposed real estate, Kinyanjui thought we should start contributing to buy land while the only active lady, Melissa, suggested we start an investment group and buy shares in a blue chip company.


But guys, it seemed, wanted something to bring in quick money. “We can start a farming venture. If we do cabbages on a three-acre piece of land, we can have our money in four months. We can lease  land, not necessarily buy land,” I posted.

This acted like magic. “It makes sense. Mkulima get us some land to lease. Let us know what would be needed,” replied Gituro, nicknamed Jeshi in our school days.

Guys seemed to like the idea of an investment that brings back money in four months. I was appointed the chairman of the land-for-lease sub-committee with Kinyanjui, the land broker, as my vice-chairman. We hit the road running.

On the third day, Kinyanjui took us to a flat five-acre piece of land. Despite surrounding farms  having young crops , this one was fallow. The owner was ready for a deal. “I will lease at Sh2,000 per acre for a year,” he offered. “But you will give me all the Sh10,000 upfront because I am traveling for a long time,” he added. This seemed  a good deal.

Later that evening, we did our estimates and updated members. Only 20 were willing to chip in and the figure for the project came to about Sh8,000 for all costs. In return, we projected Sh22,000 as profit after four months. “It is a great deal,” Kantai, screamed in finality.


Three months later, our five acre land was full of  cabbages, the Gloria variety. An argument had been advanced that Gloria cabbages have a long market life because they can  withstand sunshine.

Group members took alternate days to visit our green orchard and would post pictures on our WhatsApp group. Several names were also floated for the farm including ‘Kingstone Veges Farm’, ‘Green Orchard Farm’ and ‘Whitney Fresh Produce Farm.’

The “new farmers” were excited. We started mounting pressure on those who had not completed their Sh8,000 contribution to do so by April 10. I posted a threat. “No one will get their profit unless they clear their contributions. We need to spray the cabbages before month end.  Clear your balances promptly!”

24 hours after the posting, all balances were cleared. The pictures of the cabbages were a great motivation. The only message we kept getting from our farm hands was that several hoteliers and market women were visiting the farm and making orders of the yet to be harvested produce.

“You see, Mkulima is a genius! This idea was great!” posted Melissa, making my blood race faster in my spine in excitement.
Then it started to rain. For seven days, no one was able to visit the farm. Then when the rains subsided two weeks ago, I led a five-member team to see how soon we could harvest our treasured crop.

Alas !! We were flabbergasted. The whole farm had become a lake. Although it was not raining that day, torrents of water gushed through the farm uprooting cabbages. Several were floating. Two farm workers who had reported for the final weeding were caught up in flooding and were forced to climb the only tree in the table flat farm.

“My God ! We are finished!” shouted Kinyanjui. Most of the cabbages had been uprooted and were floating in the man-made dam. We knew our investment would never fetch our returns. I posted the disaster that had just befallen us on the WhatsApp group.

As we stood there assessing the floods damage, a worker from a neighbouring farm passed by. “Oohh, when I saw you here with Kibunja, the land owner, I wanted to tell you that this land has remained unfarmed because it floods every rainy season,” he told us. “Pole you are the fourth farmers to lose all crops,” he said.

He continued, “That is  why Kibunja asks for money upfront and disappears,” he offered. We did not wait for more secrets about the farm from this lay-about. It was too late.

Lesson: Do more research on the topography of the land you are leasing. Don’t be too much in a hurry to get returns on your farming venture.

Consider crop insurance when investing in farming.


Friday, May 29, 2015

Wood smoke that gives long life and health to milk

A mother pours milk into a gourd to prepare

A mother pours milk into a gourd to prepare Mursik. Smoking of milk handling containers helps preserve the milk. FILE | NATION 

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Smoking as a method of food preservation is practised all over the world for various types of food products, especially meat and fish.

However, smoking of milk handling containers like gourds and jerry cans is a practice only common among pastoral communities in Kenya and Ethiopia. It is done to increase the storage life of milk and also to impart a characteristic smoke flavour to not only fresh milk but also fermented camel milk known as suusa. This flavour is highly regarded by the pastoralist communities.

The technique of smoking milk containers is known as Qorasum among the Somali community. The process commonly starts first with the washing and drying of the containers.

A smouldering piece of wood is then inserted into the container and once the smoke has filled the container, it is sealed and only opened when it is ready to be filled with milk. This process only uses wood from specific types of trees.

The most commonly used tree species are Oleaafricana, Acacia totalis, Acacia nilotica, Acacia Senegal, Balanitiesa egyptica and Combretumspp. Some local names in Somali are Kulul and Marer.

Wood smoke has antimicrobial effect against many microorganisms, mainly due to phenol, a chemical in the smoke that destroys the microorganisms.


Smoke also contains different types of chemical compounds such as formaldehyde, acids and alcohols that have varying antimicrobial effects against common milk spoilage microorganisms. These chemicals, in addition to the increased temperature during smoke application, destroy bacterial cells or inhibit their multiplication.

These chemical constituents interfere with either bacterial cell metabolism or transfer of nutrients and other important substances across the cell membrane. The bacterial cell can therefore not undergo nourishment and reproduction which are important processes for survival.

Despite the efforts by pastoralists to reduce milk spoilage by smoking containers, a high proportion of milk reaching the urban markets, especially Eastleigh in Nairobi, is spoiled or fermented (suusa).

This is due to the high temperatures during transportation of the milk and the long distance from the production areas, particularly Isiolo and Garissa. The suusa fetches less money than fresh milk, therefore reducing income of pastoralists.

Milk spoilage can therefore be reduced by first observing proper hygiene during milking and milk handling, using aluminium churns or food grade plastic containers, and chilling milk during transport. This is important in assuring safety of consumers and improving livelihoods of the pastoral communities in Kenya.

The writers are part of The Dairy Team, Egerton University


Friday, May 29, 2015

Hot chilli brings cheer to farmers in dry Mwala

A worker harvests peppers at the Rupa fruits and vegetables farm in Ilula, Eldoret, on November 15, 2014.

A worker harvests peppers at the Rupa fruits and vegetables farm in Ilula, Eldoret, on November 15, 2014. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP 

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It is a dry countryside with scarce vegetation. It has little agricultural potential due to scarce rainfall. But with a little irrigation on very tiny pieces of land, farmers in Eastern Kenya have found a new cash-crop for export — red chilli pepper.

“We have done our research, and we can confirm that with just a little water, particularly from irrigation, red chili pepper can perform pretty well in such semi-arid areas,” Joseph Mwanga, the technical manager at Kandia Fresh Produce Suppliers – which exports fresh farm produce to the overseas market — told the Seeds of Gold.

With support from the Africa Development Bank (AfDB), the government undertook to rehabilitate the Kabaa irrigation scheme, which is now supporting 284 smallholder farming households in Mwala Sub-County, Machakos County.

It was due to the success of the irrigation project that Kandia Fresh Produce Suppliers decided to try out chilli farming in the area.
Josephine Kioko was one of the farmers enrolled for the trial. “I planted chilli on a quarter acre piece of land two years ago. But after it matured, the small experimental project now seems to be a real goldmine,” she says.

The farmers sell the chilli directly to the Kandia Fresh Produce Suppliers, which sends it abroad, particularly to the UK and the Netherlands.
“We assist the farmers, right from land preparation, crop management, harvesting, to post-harvest handling,” says Mwanga. “Such commitment to good agronomic practices and continuous training of farmers has propelled us to Europgap Certification,” he says.

With Sh80 per kilo of chilli to the export market, and Sh70 to the local market, Kioko says the deal is worth investing in. “I didn’t believe it the first month when I picked approximately 30kg of pepper twice every week, and later received a cheque of Sh19,200 that month,” she says.

For the past two years, Kioko says she has been earning an average of Sh25,000 every month from both the export and the local market.

Kandia Fresh Produce Suppliers supply the chilli seed to all the farmers they work with. “We give them seed in order to sustain acceptable quality for the fragile export market, and also because the seed is very expensive, costing about Sh40,000 to Sh70,000 per kilo,” said Mwanga.


With good management, the red hot pepper being trialed by farmers in Eastern Kenya can remain productive for three years after planting, and can be harvested twice a week.

And given good agronomic practices, Mwanga says, one acre of land can produce up to 300kg twice a week. With the prevailing prices, the same will earn the farmer an average of Sh24,000 per picking, which translates to Sh48,000 per week.

“We have not been able to satisfy the export market for the hot chilli pepper because we do not receive enough supplies from farmers, probably because they do not know the potential agro-business opportunity of the crop,” said Mwanga. “That is why we are now working in collaboration with farmers’ groups all over the country to upscale its production,” he said.

The biggest market for the red hot chilli pepper is Europe and the Far East.

In general, red chilli pepper requires full sun and moisture with a pH of 5.5 to 6.8, which is an optimum range for most crops in Kenya, including maize. The advantage is that chilli grows very well with limited amounts of water.

However, chillies are shallow-rooted plants, and farmers are advised to put a layer of mulch to conserve soil moisture and to keep the soil temperatures even.

Experts warn against the use of fertiliser that contains high amounts of nitrogen because they cause the plant to produce lots of leaves and less pepper. Compost manure is most preferred for the crop.

“When we receive the chilli from farmers, we grade it accordingly, depending out our customer specification. We also discard some that are malformed, and ensure that the maturity level is at least 75 percent,” said Hillary Odhiambo of the Kandia Fresh Produce Suppliers.

Kioko is in the process of increasing her acreage to at least two acres.

To keep the standards in check, the Ethical Trade Services keep monitoring the farmers to ensure that they use the right chemicals, the permitted farm inputs and ensure that the rights of the farmers are upheld while dealing with export traders.

“We are happy to see farmers benefit from this irrigation scheme, and I hope many more will join in to generate more income for their families and for the entire country,” said James Kariuki, the Sub County Agricultural Officer – Mwala Sub-County.


Friday, May 29, 2015

All you need is a business idea for funds

In caxory” —Author

In caxory” —Author 

Joseph Mungai left his hotel job in Dubai and returned to Kenya to help farmers with great agribusiness ideas achieve their dreams.

His mission started in Kirinyaga County, where he has helped several farmers groups to present documents that have attracted funding from both local and international financiers.

Mr Mungai set up Mkulima Empowerment Foundation (MeF) which links farmers with innovative ideas to non-refundable funds.
He talked to Seeds of Gold:

What were you doing before venturing into agribusiness?

I used to work Dubai as a reception manager at the Sheraton Hotel. I met many Kenyans who kept asking me what I was doing in a foreign country yet there were so many opportunities back home.

Though I was not seeing the opportunities, I came back anyway in 2007 and got a job with Plan International as a community appraisal manager. I had earlier earned a diploma in business administration from Kabete Technical Institute.

So how did you find yourself in agriculture?

Back home in Kirinyaga I could see women holding gallons of milk at 6am waiting for middlemen to come and take the milk at the price determined by the brokers. I felt sorry for the fleecing that was going on. I thought of doing something that would impact on their lives in a bigger way.

That was when I looked around, and attended workshops on accessing finance. I realised financing was one of the farmers’ biggest challenges.

I mobilised other farmers into a group which is today putting up a cooling plant under the Inoi Milk Cooling and Value Addition Project with the help of the European Union.

What is your day-to-day job?

We connect our registered members to organisations that give non-refundable capital and capacity building for free. We help farmers to have their innovative ideas funded through training.


Many people have very viable ideas that can work if financed but most of the available financiers demand conditions which many people cannot afford. From banks to micro-finance institutions, loans are prohibitive and inaccessible because many people do not have collateral.

Donor organisations should have come to their aid, but writing proposals that can secure funding is the impediment. We bridge that gap.
You secured funding of more than Sh6 million. How did you do it?

I didn’t get the money as an individual. But my group was awarded Sh6.7 million by the European Union for the proposal I did last year. I was rated the best community mobiliser out of the 11,000 applicants who did proposals. Only 124 proposals were funded, eventually.

In these workshops I realised there is a lot of money out there, but many needy people don’t know how to access it. But a warning to those who might think you can do anything with the money: If you do anything other than that intended, the donors will force you to refund every coin.

You charge individuals Sh50 and Sh100 for membership. Yet that is hardly enough to sustain a business. How else do you earn a living?
Mkulima Empowerment Foundation, as the name suggests, is not exactly a business. But, we officials and members, are business people.

We are farmers. I am a dairy farmer. The membership fee payable by phone as you can see in our website is just to facilitate our operations.

Being a member qualifies you to get our funded proposal as well as training on viable activities. Once you apply for funds using by filling in the form in our website, we visit you on the ground to access your farm. We have mainly been working with groups in the dairy industry, the most successful being the Inoi Farmers Processing Plant, which was funded by the European Union to a tune of Sh6.7 million.

There is also Kifaice Women Group and several home industry projects available in our website. Now we are opening it up because the more we are the more we can do.

What would you say the government does not do in agriculture that it ought to do?

Countries that are food secure have a keen interest in private enterprises that are doing commercial farming. We do not have enough incentives from the government.

We are yet to fully encourage young people that agri-business is a rich area to earn a living. The government should mobilise young people to engage in profitable agriculture because this will create very many jobs.


Friday, May 29, 2015

When your cow does not conceive

Most farmers have indicated that some of the

Most farmers have indicated that some of the typical signs associated with a cow in heat include increased nervousness/restlessness, mounting, head mounting, chin resting, standing to be mounted and a swollen vulva, amongst others. FILE 

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A cow exhibiting signs of heat is considered of utmost importance to a farmer.

This could be the beginning of a new life that will, upon successful conception, be brought forth in nine months. The average estrus cycle of a cow is approximately 21 days, though sometimes may vary between 18 to 24 days.

Most farmers have indicated that some of the typical signs associated with a cow in heat include increased nervousness/restlessness, mounting, head mounting, chin resting, standing to be mounted and a swollen vulva, amongst others.

Farmers must be vigilant and know what to watch out for in relation to how cows will behave in estrus, know which cows to watch by keeping good reproduction records, know how to make good use of heat detection kits such as marking crayons (often applied on the rump of the animal and will be wiped off or smeared if the animal is mounted); pressure-sensitive pads often glued to the rump of the animal emitting some red liquid when pressure is applied and heat-mount detectors amongst others. It is also recommended that farmers adjust their management regime to improve estrus detection. This can be realised by taking advantage of the “hot spots and times”.

Observation of behaviour in the “hot spots” is critical, as is the establishment of the “hot time” to detect cows in estrus often in the mornings or evenings before milking is key.

However, there have been numerous cases where the farmer seeks the services of an artificial inseminator and the services yield naught. This could either be due to poor heat detection or that the animal is not in heat. The latter is not a strange phenomenon as often farmers have indicated that some cows within the herd do not exhibit estrus behaviour.

This phenomenon is commonly referred to as anestrus, a condition defined as the lack or absence of the expression of estrus. This should not be confused with silent estrus, where no clear signs or estrus can be detected in an animal despite the ovarian changes taking place.

In dairy cattle, anestrus has been known to be associated with various factors. These factors affect the demonstration of estrus and knowledge of them is highly informative to dairy farmers and herein are possible solutions to these problems upon diagnosis.


These are issues that are associated with the surroundings and possibly management. Cows that have not been turned out, a situation whereby the cows are kept for long periods within the housing environment as opposed to being left to graze periodically in open fields, have a tendency to not display estrus.

It has been observed that movement from enclosed areas to open fields stimulates estrus. In addition, the type of housing affects the display of estrus behaviour.

The predisposing factor is slippery floor surfaces. It has been documented that on average, animals that have access to a grooved or non-cemented surface exhibit a longer duration of heat as opposed to those that have access to slippery floors.

It has also been observed that mounting occurs more frequently when cows are on a grooved or non-cemented surface.

It is thus recommended that floors should be either grooved to provide firm ground on which to stand. Good footing is very critical.

Heat stress is also a contributing factor. Some cows exhibit estrus behaviour better in cooler temperatures.

Another minor but relatively important issue is the number of animals in the herd. Sometimes, overcrowding may result to poor estrus detection but also small animal herds have been reported to affect the exhibition of estrus behaviour due to the reduced interactions between the animals.


The occurrence of some diseases such as ovarian cysts and leptospirosis has also been associated with anestrus. It is reported that approximately 70 percent of cows with ovarian cysts are anestrus.

It is thus recommended that cows diagnosed with this condition be treated immediately by a veterinarian. Cows that have sole lesions or poor structural conformation or any form of lameness have delayed estrus.

This is a common cause of anestrus and can be treated through following a prescribed hormonal programme such as progesterone supplementation. This treatment can also be used to reduce the incidence of ovarian cysts.

Poor nutrition has also been known to contribute significantly to non-cycling. There has been an observed lack of exhibition of estrus behaviour in cows that have lost weight after calving as opposed to their mates in the herd who have minimal weight loss.

In addition, nutritional deficiencies such as low dietary phosphorous and vitamin A have been reported to cause anestrus. Anaemia due to iron deficiency or high levels of intestinal parasites could also cause cows to be anestrus.

Farmers are advised to put in place the necessary corrective measures such as introducing supplements and following a well-balanced feed program.


Often after calving, cows experience postpartum anestrus. This period is a natural occurrence and cannot be avoided. It could be termed as a form of biological shut down by the dam for protection of both itself and its offspring. This can also be treated through hormonal and management strategies.

Indeed, as farmers grapple with inability to detect estrus, some of the above mentioned issues should be looked into and resolved before a farmer concludes that the animal is unproductive and thus opt to cull it.

Dr. Muchunguh is a livestock expert


Friday, May 29, 2015

Don’t uproot this shrub, it kills moles in your shamba

I’m interested in keeping layers; please advise

I’m interested in keeping layers; please advise me on the best variety in the market, the best feeds and how to feed them at all the levels of maturation. FILE 

I have this disturbing issue about my chicken. They lay a lot of eggs but they fail to complete the cycle of laying and leave their nest after a few days. This results in a lot of wasted eggs. The other issue is, I have three big kuchis which are so ferocious that they feast on the eggs and even the small chicks.
The hens are poor brooders, which may be due to hormonal imbalances or their breed type. If you rely on natural incubation of eggs to multiply your flock, consider finding a broody hen to be used as a foster brooder or induce broodiness in your hens by having a nest box in a quiet and dim area.

For the kuchi, the aggressive behaviour is mostly considered genetic and as such you should simply separate them from chicks and, as a caution, do not put the males together. Instead use them for mating by giving each male its own females to avoid unnecessary fighting (one male to five females).

Sophie Miyumo, Animal Sciences Department, Egerton University

I would like to know which breed of dairy goat is best to keep in Embu County in respect to milk volume, milking duration, rate of kidding, adaptation, maturity and feeding.

I would recommend the German Alpine or Toggenburg dairy goat breeds with at least 75 percent of either of these genotypes if you intend to upgrade from local breeds. The German Alpine is a relatively hardy breed with an impressive observed performance in the tropics in terms of milk yield, lactation persistency / length and reproduction. The breed is popular around Nyeri region and has been known to produce on average 4.5kgs per day under good management. Likewise, Toggenburg crosses have also performed quite well around Meru region with farmers under the Meru Dairy Goat Breeders Association.
Kimitei Ronald Kipkogei, Animal Sciences Department, Egerton University.
I live in Kabondo Kasipul Constituency in Homa Bay County. I would like to venture into dairy farming but I am really troubled over what breed can do well in the area, if at all there is.
Collins Otieno
The choice of breed should not cause you a lot of worry rather it is management practices that matter. Dairy cattle breeds common in Kenya can all thrive in your area so long as the right conditions are provided.

These conditions include balanced and adequate feed, unlimited access to cool clean drinking water and shelter against adverse elements of weather. Nonetheless Ayrshires can be more ideal for Homa Bay County due to their relatively smaller body frames, lower feed consumption and perceived hardiness.

Kimitei Ronald Kipkogei, Animal Sciences Department, Egerton University

I’m interested in keeping layers; please advise me on the best variety in the market, the best feeds and how to feed them at all the levels of maturation.

For hybrid layer birds, consider the Issa Brown, which you can source from Kenchic. In management, provide supplemental heating using infra-red bulbs for the first four weeks of the chick’s life. Vaccination procedure should be as follows; New Castle Disease at day 7, Gumboro at day 14, fowl typhoid at week 9, fowl pox at week 18 and de-worm at 19 weeks just before laying begins and thereafter, de-worm after every six months.

Provide chick mash of 35-75g/chick/day between 0-7 weeks of age. This should be increased gradually such that the birds are fed 75g/bird/day by the 6th week. Introduce growers mash gradually during the 7th week, thereafter provide 75-110g/bird/day of growers mash until 20 weeks of age.

Finally the adults should be fed 110-140g/bird/day of layers mash. Ensure feed is of good quality, consider Unga/Pembe Feeds. Avoid abrupt changes in source of feed and feeding times. These factors greatly affect egg production. Provide clean water daily.

Sophie Miyumo, Animal Sciences Department, Egerton University


I own a 1/4 acre plot, and hire a half acre. Please let me know more about contract farming, especially of pigs, chicken and rabbits. I intend to raise about 100 pigs for 10 months which can fetch me Sh1m, but the cost of feeds and startup capital is a challenge please advise.

Contract farming, though a fairly novice concept in Kenya, ensures that farmers have a ready market for their products irrespective of market fluctuations and therefore cushions them against potential losses. Several companies in the country enter into various contractual agreements with farmers.

For instance, Farmers Choice has an arrangement with farmers where they can offer free field extension and pig transportation services as well as sell superior genetics and subsidised feed to farmers who supply slaughter pigs to the company.

Kenchic also offers contracts for poultry farmers who meet certain requirements through its farm-to-fork policy for enhanced traceability. Alcare Kenya Limited engages rabbit farmers in contracts. Write up a detailed farm business plan for about five years and consider taking a low interest farm start-up loan. The secret to farm success is always prudent management.

Kimitei Ronald Kipkogei, Animal Sciences Department, Egerton University.

I have been keeping some chicken, and of late I have realised that some of them feed on their feathers. What could be the cause of this?

This condition is known as feather pecking and it usually starts with back feathers, and may progress to the tail and the whole body. Feather pecking is mostly a consequence of poor housing conditions that result in bullying.

The predisposing factors include overcrowding, excessive light and temperature, insufficient or improperly placed feeder or drinking space. Chicken are by nature territorial and as such consideration must be given to the stocking density.

In addition to environmental conditions, the other probable factor is nutritional imbalances such as mineral deficiencies, like sodium which is common in cases where the birds lack salt in their diet. Amino acid (methionine) deficiency, feeding high energy diets with low fibre are also likely to result in feather pecking.

Sophie Miyumo, Animal Sciences Department, Egerton University


My chickens are discharging some mucus from their noses and they keep on coughing. It’s like their noses are blocked and they struggle to breathe. I have tried some antibiotics (skarzone) but the problem is still there. Kindly advise.

Ombata Erick
Consider your ventilation conditions and dust within the poultry house, also factor in the condition of the litter material if being used. These are some of the factors that predispose your birds to respiratory disease which will continue being a nuisance if the birds are kept in poor environmental conditions.

Once these factors have been corrected, consider a broad-spectrum anti-biotic (tetracycline) which you can source from the agro-vets to help control the pathogens infecting your birds respiratory system.

Sophie Miyumo, Animal Sciences Department, Egerton University

After a drought or dry spell, what happens to a cow in terms of feeding and how can one remedy the situation.
Githinji Jon

Dry spells are usually characterised by reduced availability of water both to animals and plants. Plants become fibrous and their mosture content decreases, and they may loose nutrients. During this period a cow’s digestive system adapts to high fibre feedstuff and may require higher level of supplementation to avoid losses in production.

After a dry spell comes a wet season which is characterised with lush forages. This change in diet implies that the cow’s digestive system will equally adjust from digesting highly fibrous material to succulent material high in soluble sugars and unbound nitrogen sources. This drastic changes in diet, if not checked, leads to digestive system upsets such as bloat and diarrhoea.

To minimise these, ensure that the proportion of roughages fed to the cow is near uniform as much as possible both in the wet and dry seasons.

During wet season, feed the animals with wilted forages and as well provide them with dry forages such as hay preferably early in the morning. During the dry season, its advisable to add value to the dry forages by mixing with a soluble sugar and nitrogen soures such as molasses and urea respectively.

James Wangui Chege, Animal Sciences Department, Egerton University


I am a poultry farmer with some farming experience. I have established a pen for more than 5,000 birds. I am interested in venturing into exotic layers. My preferred supplier is Kenchic due to their experience.

However, I have an issue. From 1986 to 1988, I was in charge of rearing exotic layers on behalf of my parents. We used to feed them on Unga Feeds. The results were wonderful; after 18 weeks I could get the first egg.

I want to achieve similar results. I have visited other poultry farmers and have found that they have achieved inferior results using a variety of feeds.

Today, there are a variety of chicken feeds being sold everywhere. I am zeroing in on two brands — Unga and Pembe. Kenchic vets have recommended to me Pembe Feeds. I would like your professional advice on the best choice of feeds based on balance of nutrients disregarding the costs, between Unga and Pembe.

The exotic layers from Kenchic have no genetic connection with Pembe feeds. What you should bear in mind is that good feeding management and good genetics are key to high performance.

Therefore in your case, what the Kenchic vets are experiencing is simply high quality feeds from Pembe complementing the good genetics from Kenchic resulting to high performance. With regards to choosing feeds between the two companies, am in no position to advice on one brand over the other. However, note that both companies are reputable regarding quality of feeds.

Sophie Miyumo, Animal Science Department, Egerton University

How do I use half an acre of waterlogged land during the rainy season? I have already prepared the land.

Paul Mwangi, Mois Bridge

Excess water in the crop root zone soil is injurious to plant growth. Crop yields are drastically reduced on poorly drained soils and, in cases of prolonged waterlogging, plants eventually die due to a lack of oxygen in the root zone. This may result in excess soil salinity, i.e. the accumulation of salts in the plant root zone.

Waterlogged soils release increased amounts of nitrous oxide (N2O), a particularly damaging greenhouse gas. Drainage can be improved on many sites and is the first thing to consider once a waterlogging problem has been identified.

Artificial drainage is essential on poorly drained agricultural fields to provide optimum air and salt environments in the root zone. Drainage is regarded as an important water management practice, and as a component of efficient crop production systems.

To solve the problem, you can dig trenches to drain the water from the farm as a better alternative of reclaiming the waterlogged piece of land.

Hezekiah Korir, Crops, Horticulture and Soils Department, Egerton University


Friday, May 29, 2015

I gave up sugarcane and became East Africa’s best soybean farmer

Mr Nehemiah Odhiambo on his Soybean farm in

Mr Nehemiah Odhiambo on his Soybean farm in Stella village in Migori County. Mr Odhiambo has been recognised as the best soybean farmer in East Africa. ELIZABETH MERAB | NATION MEDIA GROUP 

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Weaving through the sugarcane plantations gives one a feeling of sweetness that Migori County holds.

We see plantation after plantation of cane that feeds the South Nyanza Sugar Company, often simply known as Sony Sugar, towering over other crops and pasture.

Sugar cane, and tobacco, has been the only cash crop grown in Migori, until recently when proceeds from sugar companies started dwindling.

When the vast lands are not under sugarcane, the locals prefer subsistence farming — a bit of maize here and beans there.
However, these, too, do not do very well around here.

All is not lost, however, as one farmer from the county has found out.

Tucked away somewhere in the midst of the towering cane plantations is Mr Nehemiah Odhiambo’s soybean farm. He was among the first farmers to adopt the new crop in the county, and he has no regrets so far.

For him, the long wait before harvesting sugarcane was probably the first disheartening factor even before the prices came tumbling down.
“I tried growing both sugarcane and tobacco on my farm, but both would take long before harvest and payment. For instance, I have to wait for close to two years for sugarcane to mature, yet I need to send children to school,” he says.

He started growing soya beans five years ago after learning about it through a farmers’ cooperative society.
“Back then, farmers were just talking about ‘soya.’ No one really knew much about the crop.”

Through a farmer friend, Odhiambo got seed and the know-how of growing the crop. To his surprise, his decision would end up bringing him money, exposure and accolades.


“I had to learn everything anew. I was very keen to change my reliance on sugarcane,” he says. And reward came fast and furious.
The thought of being part of the team that produces the crop that makes Sossi meat, soy milk, soy flour, soy protein and other products never occurred to Odhiambo when he first started growing the crop.

Just a year after adopting soybean farming, Odhiambo was feted as the best soybean farmer in East Africa. Although he does not know how he became the best, Odhiambo is certain about one thing: He did his farming right.

“Three companies came to the farm to inspect how the crop was doing and even took pictures of us. Little did I know that they were doing all that for a competition. I was amazed to learn that I had actually won,” he says.

The secret, he says was that he plants quality seeds. One acre gives him half a tonne.
The father of three explains that growing the relatively new crop is the easiest kind of farming a farmer can choose. However, any neglect can also cost one dearly.

“This crop needs frequent weeding. For instance, on this two acre farm, I weed after every two weeks.”
The crop is planted two to three weeks before the rains. After preparing the land, he soaks the soy seeds in a Biofix solution, an organic fertiliser meant for of leguminous crops, before planting.

He uses his harvest to get seeds for his next season’s planting.
“With soya, the current harvest makes the best seed crop and has 99 per cent chances of germinating well,” he explains.

Mr Odhiambo says that he got his first seed from a fellow farmer, and since then he has not bought any seeds. However, he prepares seeds for sale to other farmers.

Before selling the seeds, he ensures that they are well dried and selected. He sells a kilogramme at about Sh150 to Sh200.
“I ensure that I only sell the best seeds. Black seeds or those that are smaller than the rest, are separated.”
Odhiambo gets a harvest of up to 1.6 tonnes from his two-acre farm.

Although he has not started adding value to the crop, through a cooperative society (Migori Pamoja Cooperative Society), he and 40 other farmers have managed to get into partnerships with companies like Promasidor, the makers of Sossi.

Being a new crop among Kenyan farmers, Kenya produces about 300,000 tonnes of soybeans yearly. Half of the produce comes from Migori County, which produces 156,000 tonnes.

However, Odhiambo, who is also the area chief, says there are challenges.

“One of the major challenges is that it requires financial muscle to weed the crops after every fortnight.”

He encourages farmers to join cooperative societies to give them a stronger bargaining power.


Wednesday, May 27, 2015

Go online to file your tax returns

Tax payers queue outside the Kenya Revenue Authority offices to file their tax returns. One does not necessarily need to visit these centres if you have Internet access.  PHOTO | FILE

Tax payers queue outside the Kenya Revenue Authority offices to file their tax returns. One does not necessarily need to visit these centres if you have Internet access. PHOTO | FILE 

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You have until June 30 to file your tax returns.

And by completing the process online, you will save yourself from the last minute rush that usually results in long, winding queues at the Kenya Revenue Authority offices in Times Tower, Nairobi, every so often.

To ease the process, the taxman has come up with an online platform  — iTax — a robust system to help you file your tax returns at the comfort of your home or office.

To help taxpayers use the system, the authority has also come up with iTax support centres, which are small branches, located in different parts of the country, where you can seek assistance incase you have challenges or questions on filing your tax records.

In Nairobi, the iTax support centres are located in Railway Club, in Mombasa, the shop is at Customs House (Long Room), the Kisumu one is at Swan Centre.

For taxpayers in Nyeri, once can get help at  Premier Plaza while Eldoret iTax support centre is at Kiptangich House.


Kenya Revenue Authority domestic taxes department, medium and small tax payers commissioner Alice Owuor told Money that one does not necessarily need to visit these centres if you have Internet access.

However, before you log in to the KRA iTax portal, you need to have the following items ready:

If you are employed, get a Form P9A from your employer.

You also need your employer’s Personal Identification Number (PIN) if it’s not already indicated on the P9A. An employer’s PIN ascertains that your employer transacts with the Kenya Revenue Authority.

In case you are not employed, you need to have all your financial statements ready, for instance, business income, farming income or rent income.

For taxpayers with a salary, you need to enter all your income from the employment. Further, one should furnish the taxman with  details of other employment benefits such as car, house and pension income in case you are a pensioner.

When you finally log in into the KRA website www.kra.go.ke, select the link — File Tax Returns under online services.

The website is user friendly and provides a step-by-step filling procedure.

The commissioner says that the authority has reduced the number of forms, which people with employment income need to fill.

“We have made it simpler for those in employment, they make around 75 per cent of those who file returns, it will take them around five minutes to fill the form,” said Ms Owuor.

For taxpayers, who are employed but have other sources of money other than employment income, for instance, farming, rent, interest income, there are specific slots where they can provide these vital details to the taxman.

Once you complete filling the forms, click submit and then calculate.

A successful process would see you get a message informing you that your request has been processed successfully.

If you do not submit your tax returns by June 30, you risk being  penalised five per cent net tax every year, with the minimum penalty being Sh1,000.


There is a group of filers called the nil filers, these are people, who have registered a company hoping to run a business but they have not started it yet. They will also be required to submit their tax returns online.

“No manual nil returns will be accepted in the KRA offices because for nil filers, their online process is the easiest and shortest,” said Ms Owuor.

The authority is urging taxpayers to file tax returns online since it takes a short time and energy compared to queuing at the taxman’s offices at Times Tower.

Ms Owour says the system has been upgraded to accommodate high traffic.

“We have invested in high capacity servers, we have done test runs on the website, and stress testing and we have found the system capable of handling large number of users,” said Ms Owuor.

The taxman is also coming up with more iTax support centres to reduce on the heavy traffic of people experienced at the KRA main offices.

New offices are coming up in Embu, Meru, Garissa counties as well as in Nairobi’s Eastleigh. KRA services can also be found at all Huduma Centres in Kenya.



what the law says on rent income

The Law

Rental income is taxable under Section 3(2) (a) (iii) of the Income Tax Act, Cap 470

Laws of Kenya. In addition, rent on non-residential buildings (Commercial) is also

taxable under Section 5 and 6 VAT Act Cap 476.


What is Taxable?

All rent, premium or any other consideration for use or occupation of property.


Rates of Taxation

Taxation rates are dependent on whether the taxable person is an individual or

corporate entity and whether they are resident or non resident.

1. For resident individuals, the annual tax rates (on total annual income including

net rent income) are as follows:

On the first Sh121,968 .....10pc

On the next Sh114,912 .... 15pc

On the next Sh114,912 .... 20pc

On the next Sh114,912......25pc

On all income over Sh466,704...30pc

Note: The above scales are referred to as “graduated”


Kenyans in the diaspora

Any Kenyan living out of the country but owns property in Kenya must pay tax in

Kenya on the rent earned. If non-resident (as defined in Section 2 of the Income

Tax Act Cap 470), such rent is subject to a withholding tax at 30 per cent of the gross

which is then a final tax. However, if resident the rate of tax shall be at graduated

scale on net rent income.


— Source: KRA


Wednesday, May 27, 2015

My dream to run bookstore comes true

For Jayanti Bhanderi the best decision he has ever made in his life is to quit his job. And the leap of faith he took to start a bookshop after working for over 10 years in Eldoret is slowly turning his childhood dream of starting his own business empire into reality. PHOTO | FRANCIS MUREITHI

For Jayanti Bhanderi the best decision he has ever made in his life is to quit his job. And the leap of faith he took to start a bookshop after working for over 10 years in Eldoret is slowly turning his childhood dream of starting his own business empire into reality. PHOTO | FRANCIS MUREITHI 

By Francis Mureithi
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For Jayanti Bhanderi the best decision he has ever made in his life is to quit his job.

And the leap of faith he took to start a bookshop after working for over 10 years in Eldoret is slowly turning his childhood dream of starting his own business empire into reality.

His outfit at the junction of the busy Mburu Gichua street and Maasai Avenue is a one-stop-shop dealing with a range of stationery, text books, school uniforms, laboratory and sports equipment as well as staff uniforms.

As the sun sets on the back to school shopping for the second term, the 8,000-square-feet Bookmart Supermarket has been a beehive of activities attracting students, parents, corporate customers and book-lovers due to its wide range of products.

“When I quit as a shop assistant in a bookshop in Eldoret, I came to Nakuru, found this building that was neglected and after surveying it, I decided this is the right place to set up my business,” the 31-year-old business graduate from Shardar Valbhi Patel University, in India, says.

Unlike many young entrepreneurs, who lose hope and focus in business soon after starting, Mr Jayanti says many young people venturing into business want to become rich overnight.


“Patience is key. I waited for a decade to start my own enterprise and when I began the journey on July 2013, it was not a walk in the park as I was not able to pay my suppliers. I even struggled to pay rent and staff salaries,” Mr Jayanti told Money.

However, he turned to Diamond Trust Bank, which provided him with long-term financing plan that has seen the bookshop stock virtually all variety of text books.

“DTB Bank played a key role in stabilising my journey that was almost coming to an abrupt end,” he says.

Mr Jayanti believes that the best way to market such a venture is to provide quality service and treat every customer like a king.

Customer service

“Handling of customers with utmost care and offering the best service even when they are just window shopping is vital,” said the father of two.

Besides offering affordable prices and first class customer service, he says doing a transparent business with suppliers and your staff is crucial.

“The moment you are not transparent in your business deals, this will trickle down to the staff, who are your number one ambassadors and this will have a negative effect as the business will be known for all the wrong reasons,” he said

This business is regarded by many as seasonal and thrives during back-to-school seasons.


However, Mr Jayanti believes that it is an all-season business and has set up a strong sales team to go to schools, colleges and companies to market its products.

Is there money in this venture?

 “Yes, there is good money and the beauty of this industry is that there is an increasing number of pupils and students accessing primary and secondary education,” he adds.

“Unlike when I started, today I have no worries about paying my suppliers, rent, salaries and other levies and with proper planning and advertising, things can only get better,” he said.

He started with 18 staff but as the business expanded, he has employed 12 more people.

Like any other venture, the road to success has many hurdles.

“The main one being dead stock. Books that stay in the shelves for more than three months are a big risk because suppliers will always be on your neck demanding their payment,” he said.


Wednesday, May 27, 2015

Give me waste fabric and I’ll make you nice sandals

Isaack Kamau displays the pairs of sandals he makes at his house in Flamingo Estate, Nakuru on May 9, 2015. PHOTO | SULEIMAN MBATIAH

Isaack Kamau displays the pairs of sandals he makes at his house in Flamingo Estate, Nakuru on May 9, 2015. PHOTO | SULEIMAN MBATIAH 

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It all started with turning a pair of worn out shoes into sandals using a piece of cotton cloth.

Out came an outstanding footwear, which Mr Isaac Kamau’s brother wore to Kisumu while hunting for a job in the lakeside town. That was three years ago.

Well, people loved Mr Kamau’s work and some demanded to know where they could buy similar footwear.

But the 35-year-old could not immediately understand why people adored his work. Little did he know that he had just exhibited his talent and soon, it would start bringing him good tidings.

And so when his brother failed to get a job at the lakeside city, he returned to Mr Kamau’s house at Flamingo estate, in Nakuru, where he shared his experiences about his shoes.

“At first, I laughed because the shoes were oversize.” Mr Kamau told Money at his house from where he makes the now popular fashion of sandals.

“Later, he told me that I actually got the talent and the fact that a number of individuals had recognised the shoes meant that they were attractive,” said Mr Kamau, whose parents died while he was in class one forcing him to drop out of school.


Convinced on his ability, his brother invested Sh1,500 in buying him the tools of trade — waste fabric from second-hand clothes, a pair of scissors, craft knife, waterproof glue and a hammer.

The first six pairs of sandals, which he made in the first week, were bought by buyers immediately. But there was a problem. Mr Kamau did not understand the small matter of why pricing is a vital element in business. He let the buyers take control and as such, he made no profit.

“I sold some pairs at Sh200 and others at Sh300. I did not make any profit. My brother was very mad with me. I did not know what to do next since I did not have any other source of income,” he said.

The consequences of his poor decision hit him hard. And for six months, he turned to menial jobs with a view to raise capital to start afresh, but it was all in vain. Overwhelmed with distress, he begged his brother, a hairdresser, to finance him on agreement that he makes profit in order to sustain his business.

Now, when you order for any size of his sandals for an adult, be prepared to part with at least Sh700.

Give him worn out tyres, sheets of fabric from tents, denim, light or heavy leather; materials used for making couches and he will deliver sandals for your leisure or evening walk. He will make you the type that would soothe your feet during the sunny days of the year when closed shoes are an unbearable footwear.

As long as the materials are available, men, women and children can have their designs made since Mr Kamau can make up to six pairs of footwear per day.

And when he is not out in the market, you will find him doing the measurements, gluing the soles or shaping the shoes using a knife and a hammer.

He uses a standard sole to cut out the tyre, which serves as the outer sole.

He refers to the measurements to piece together a hard sheet, which is attached to the piece of tyre as the inner sole, before joining it with either leather, denim or fabric material. The shoe straps are also made from similar materials.

A pair of children sandals goes for a maximum of Sh300 while those for the adults retail at over Sh700.


However, a major challenge in his venture is customer’s devaluation of his work. Some buyers, who perceive the venture as cheap, demand to buy the sandals at throw away prices.

“A customer would want to buy leather sandals at Sh200. Of course it is not in his interest to know the cost involved, but leather is expensive. A two-metre piece goes for Sh800, which can produce a maximum of 10 pairs of sandals,” he said.

He says as long as the buyer takes good care of the sandals, they can remain in good condition for up to three years.

Thanks to his creativity, traders from as far as Rwanda and Tanzania are making steady orders of up to 50 pairs a week. “These are customers, who saw someone wearing the sandals and directed them to me,” says Mr Kamau, who also makes door to door sales.

For the last one year, he has been a contestant in some competitions exhibiting his innovative range of products. The latest expo was held in Rwanda early this year but it passed him due to the huge financial requirements which he couldn’t meet at the time.

At the moment, Mr Kamau says he is saving in order to open a shoe workshop in Nakuru. And to augment his income, he has opened a boutique that is run by his wife.

Although, his dreams are big and he wishes to achieve them before he is 45, he is reluctant to take a bank loan fearing of losing his business should he fail to repay within the time limits.


Wednesday, May 27, 2015

Buy Barclays but hold NBK stock

The Nairobi Securities Exchange. Old Mutual Securities notes that Barclays Bank is currently undervalued. “Our model suggests a fair value of Sh17.79 per share in comparison to the current low price of around Sh15 per share.” PHOTO | FILE

The Nairobi Securities Exchange. On Thursday, investors got a reprieve when the government scrapped the controversial capital gains tax. PHOTO | FILE  NATION MEDIA GROUP

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BARCLAYS: A market report by Old Mutual has recommended this stock as an accumulate from a hold position with a rise target of Sh17.79 per share this year.

“This investment case is based on a recovering loan book and deposit growth that is driven by diversification into new areas of business, and strategic shift to small and medium enterprises,” says the report.

Over the past six years, Barclays has been losing market share in loans advanced in comparison to other large banks. “The bank is, however, witnessing a wind of change, from which we forecast a three-year growth in loan book to Sh171.07 billion, driven by a 10 per cent increase in customer deposits and a loan to deposit ratio of 78 per cent this year alone,” says the report.

Further, Old Mutual Securities notes that Barclays Bank is currently undervalued. “Our model suggests a fair value of Sh17.79 per share in comparison to the current low price of around Sh15 per share.”

The note adds that the stock has an upward potential of up to Sh19.23 apiece. “This should be driven by an over six per cent GDP potential, a stable currency and low inflation of below four per cent,” says Old Mutual.

In the same vein, the stock is seen as holding a base case price of Sh17.70 per share this year, fuelled by on-going diversification or revenue strategy and a shift to retail and SME.


“The cost of management initiative adopted by the bank will result in higher profitability going forward.” Diversification into SME sector is expected to increase the bank’s loan book to Sh141.38 billion in 2015 from six per cent recorded by the bank in 2014. On the opposite extreme, the counter has bear case price of Sh16.41 per share for the year 2015 based on rising competition and possible changes in the regulatory environment.”

On Thursday, the share closed the day at Sh15.20 per share from a traded volume of 1.31 million shares, a 0.33 per cent drop. On Friday, the counter opened the day at Sh15.05 per share with an early intra-day trading high of Sh15.20 per share. The share has traded at a high of Sh18.45 and a low of Sh15 over the past one year. 

NBK: This counter is recommended as a hold. According to Old Mutual Securities, NBK is currently trading above its fair value of Sh19.84 per share at Sh21 per share.

For instance, on Thursday last week, the stock had closed at Sh21 from a low traded volume of 17,200 shares. On Friday, the counter opened at Sh21 per share.

Over the past one year, NBK has touched a high of Sh33 per share and a low of Sh19.75 per share. “Currently, the bank’s Capital Adequacy Ratios are under pressure and this constrains the bank from mobilising deposits and lending,” says Old Mutual.

For the bank to deliver higher growth rates, Old Mutual said, it will need to raise more capital. However, its Sh13 billion cash call has been iced by the markets regulator’s delays in granting NBK a rights issue approval.

The report cautions that while holding, investors should take note that the expected merge between NBK and Consolidated Bank could further harm its current loan book.

“The declining net interest margins remain a threat to the bank’s profitability growth,” notes the report. “Similarly, efforts by the government to strike a balance between economic growth and management of economic risks in the face of a falling exchange rate could possibly lead to contractionary monetary policies that lead to higher non-performing loans.”

In 2014, the bank’s bad loans stood at 10.6 per cent. This was much higher compared to the banking sector’s average of 5.1 per cent. NBK, which is the 12th largest bank in Kenya by asset size, will be majorly fuelled by regional expansion, organisational re-design, alternate banking channels, and the newly launched Chinese Businesses section, notes Old Mutual.


Wednesday, May 27, 2015

Getting your business card noticed

A good business card should convey the overall image of your business You can’t expect your business card to tell the whole story about your company. PHOTO | COURTESY

A good business card should convey the overall image of your business You can’t expect your business card to tell the whole story about your company. PHOTO | COURTESY 


A good business card should convey the overall image of your business -- not easy, considering the card measures only 2 inches by 3.5 inches.

How can you possibly get a message across in such a small amount of space?

You can’t expect your business card to tell the whole story about your company. What you should expect it to do is present a professional image that people will remember.

The colour, wording and texture of a business card have a lot to do with its appeal and its ability to convey your company image. Use common sense when you are designing your business card.

If your business markets children’s toys and games, you might try using bright, primary colours and words written in child’s script.


On the other hand, if you run a financial consulting service, then you want your business card to convey professionalism and reliability, so stick to traditional looks such as black printing on a grey, beige or white background.

Of course, professional designers claim entrepreneurs should not try to attempt designing a business card on their own, but many cash-strapped business owners have no other choice.

The best course of action: Look at all the business cards you receive, and emulate the cards that you like. You may have more leeway if you are in a creative business, such as party planning or retailing, but in general, keep the following tips in mind:

1. Use your logo as the basis. Make it the largest element on the card.

2. Keep it simple. Do not cram too much information on the card.

3. Include the essentials — your name, title, company name, address, phone and fax numbers, and email and website addresses.

4. Make sure the typeface is easily readable.

5. Stick to one or two colours.


Once you’ve got business cards, make the most of them:

1. Always give people more than one card (so they can give it to others).

2. Include your card in all correspondence.

3. Carry cards with you at all times, in a card case so they’re clean and neat.


Business cards don’t have to be boring. If your industry allows for a little creative flair, here are some ideas to try:

1. Use 4-inch-by-7-inch cards that fold over (like a mini brochure), cards made of plastic or cards with photos on them.

2. Although they are more standard than standard business cards, cards in nontraditional shapes get attention. Try a teddy bear shape for a day-care service, for example, or a birthday cake for a party planner.

3. Textured paper can add to a card’s interest, as can colored paper. In general, stay with lighter shades that enhance readability.

4. Thermography, a process that creates raised, shiny print, adds interest to a card. Embossing and foil stamping are two other printing processes that can give your card visual appeal.


Wednesday, May 27, 2015

How to overcome failure in business

When you meet a successful business person, you are indeed meeting someone, who has learnt how to overcome failure. A person who does not get beaten and lose hope in being an entrepreneur. People who take failures as lessons and use the new knowledge to spring back. PHOTO | FILE

When you meet a successful business person, you are indeed meeting someone, who has learnt how to overcome failure. A person who does not get beaten and lose hope in being an entrepreneur. People who take failures as lessons and use the new knowledge to spring back. PHOTO | FILE 

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I remember my primary school days when we used to run cross country. Cross country is a tough sport in which people run on open-air courses over natural terrain in the fields or nearby roads.

I am the type that always tries to excel in every activity. I remember pushing myself hard, running breathless and my heart pounding hard.

All this while, some gifted runners made it look pretty easy. But once at the finish line, I would be exhausted yet happy to have finished the race.

We all get into business with a similar attitude – to excel and make good money. However, along the way, we give the business everything but still realise that some things are not working and the money is not as good as you hoped.

We find ourselves pushed to accept that the venture is about to fail or is indeed failing.

I have been in business for slightly over 10 years now and I have discovered that failure is part of the journey to success.

When you meet a successful business person, you are indeed meeting someone, who has learnt how to overcome failure.

A person who does not get beaten and lose hope in being an entrepreneur. People who take failures as lessons and use the new knowledge to spring back.


Many of the renowned business people around the world have had difficult times to get to where they are today. Do you know one Akio Morita, the Japanese businessman, who began Sony? He did not have a rosy start.

Although we know Sony as an electronics giant that has recorded big success in making entertainment units ranging from TVs to playstations, its first product was a rice cooker, which sadly, burned the rice!

But Akio moved on coming up with bigger and better devices, which we all know Sony for today.

Do you know that the world’s richest man, Bill Gates, before building his Microsoft empire as we know it today failed in a venture called Traf-O-Data?

The outfit was meant to read raw data from road traffic counters and create reports for traffic engineers.

Gates and his partner had to get an engineering friend to help them build a computer on which they could run their software. After hard work and a visit from the county officer, it turned out that the product did not work.

Soon after, the State of Seattle in the US, where they lived, offered free traffic processing services to the cities making the effort of private contractors, among them Traf-O-Data, redundant.

This experience that was not entirely successful was the springboard of what we know as Microsoft today.

And with his business partner Paul Allen, Gates went on to create one of the most successful software companies in the world.

These are just two examples, we have many other success stories.

If you read the stories behind most of world billionaires, you will learn that success is indeed a journey, often fraught with failures.


But what do those who succeed have in common? One, they are always switched on to a positive mode.

They don’t fight failure, they embrace it and only then are they able to understand what an experience it was. Always take note on what you did right and what you did not. Reapply what you did right and get solutions for what you did wrong.

It is very important that you are aware of what to continue building on.

Second and most important, start again. For those who overcome failure, the mood is always simple — get up, brush off the dust from the fall and walk with your head high towards your next venture.

Otherwise, failure will knock you off the entrepreneurship road and you shall soon be back to where you were before your tried business.

Few entrepreneurs usually make it with the first jump, as such, be prepared for multiple attempts to reach your goals.


Wednesday, May 20, 2015

The pain of a weakening shilling

When the Kenya shilling slid against the dollar early this year, the drop was perceived as a minor slip up, from which the local currency would recover fast. After all, the last time the shilling had been battered hard was in 2011. PHOTO | FILE

The Central Bank of Kenya (CBK) Wednesday sold an unspecified amount of dollars directly in the money markets to support the shilling, which had weakened past the 99-units to the greenback. PHOTO | FILE 

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When the Kenya shilling slid against the dollar early this year, the drop was perceived as a minor slip up, from which the local currency would recover fast. After all, the last time the shilling had been battered hard was in 2011.

“Back then, the nose dive was attributed to increased borrowing, imports and high inflation,” says Benjamin Wasilwa, an importer. “Last year, it depreciated a bit, and we were hopeful that there would be some recovery this year. We did not expect the shilling to lose so much ground.”

Five months down the line, though, the shilling has hit levels last seen in 2011 before it touched a historic all-time low of Sh107 to the dollar on October 11. Back then, the Central Bank raised its key lending rate by 550 basis points to 16.5 per cent to stem volatility in the exchange rate and spiralling inflation.

Consequently, overnight rates shot up to 25.9 per cent, making funding of dollar positions costly while cutting demand.

Since January, though, the shilling has lost 6.3 per cent against the greenback. This has been more than the cumulative 4.3 per cent the shilling lost in 2014.

The magnitude of the drop came to the fore last week when the unit succumbed to a three-year low of Sh96.80/97 to the dollar.

Just a week ago, a market report by Commercial Bank of Africa warned that the shilling was likely to drop further.

“The shilling’s outlook remains poor. There’s a high likelihood that it may breach the Sh96 mark,” said the report.


The survey was echoed by technical analysis of the 14-day and 50-day weighted moving averages that showed the short-term outlook of the shilling to be dim against the dollar.

According to National Treasury Cabinet Secretary Henry Rotich, weakening of the shilling is due to persistent poor performance of tourism and horticulture as well as insecurity.

The government is considering drawing from Sh64 billion borrowed from the International Monetary Fund (IMF) earlier in the year to shore up the shilling. “We’re keenly looking into the volatility of the shilling and what is fuelling it.

Once we find out, we shall be in a position to withdraw the IMF funds. This should be within a month or two,” said Mr Rotich recently.

Research analyst George Bodo says the shilling’s depreciation can be partly attributed to the “weakening in the foreign exchange earning capacity, the strengthening of the US dollar globally due to the improving domestic absorption rate in the US economy and seasonality in demand for foreign exchange.”

Financial analyst and Rich Management CEO Aly Khan Satchu says profit bookings by foreign investors is driving the shilling deeper into crisis.

“We’ve seen the market getting weaker by the day as foreign investors book their gains before the shilling weakens further,” says Mr Satchu.

The vacuum created at the Central Bank has resulted in a defensive mode against the weakening unit. “We see more nervous people unwilling to touch the shilling in fear and defence against further plummeting. This ends in a self-fulfilling prophesy,” adds Mr Satchu.

His sentiments are echoed by Nation economic affairs editor Jaindi Kisero, who notes that the CBK governor’s shoes must be filled to offer direction to the markets.

“Calm and confidence will only return once the markets understand the options that are available to the Central Bank. Failure to this, we must brace for games and tactics by dealers and Treasury managers.”

To cushion themselves from the effects of a weak shilling, some traders such as Mr Wasilwa have taken to operating their businesses using a dollar account. Take Nahashon Muema, an exporter of horticultural produce, for instance. “It is cheaper for me to operate from a dollar account than say to buy dollars at the current high rates,” says Mr Muema.

“The weaker the shilling gets, the more value I get from my produce. In any case, I’ll get good money once I convert my dollars into the local currency.”


However, Mr Satchu notes that this plan could demolish the shilling further. “If people open dollar accounts as a hedge, the shilling will hit Sh100 against the dollar in no time,” says Mr Satchu.

Losing more

In given instances, local exporters will seem to be in for more gains as the shilling weakens further. This is due to the exchange gain they get once paid using dollars.

However, Mr Satchu dismisses such gains, noting that a weak shilling does not benefit the Kenyan economy. “The notion that a weak currency is beneficial is actually a fallacy. A weak currency is a double-edged sword to our economy, unless we were to be as big in exports as Germany. Currently, we are losing more because we are being forced to pay more,” he says.

Apparently, the import–export deficit relief that was to come from low oil prices in the global markets never came to fruition. “Where is this export that’s going to be the redeeming factor of the shilling? Are we selling more agricultural produce? No, we simply aren’t selling more,” observes Mr Satchu.

In 2013 and 2014, the shilling depreciated due to low tea prices. In February, the unit had firmed helped by dollar inflows from tea auctions and tight liquidity resulting from a bond sale.

Nevertheless, according to Mr Kisero, the shilling should stabilise in the medium-term. “Oil prices are expected to stay low, this coming at a time when we are seeing increased dollar demand. Similarly, we have seven billion dollars in foreign exchange reserves and an IMF cushion in case the volatility persists,” he says.

Mr Satchu adds that while the CBK needs to stem the slide, we have no deep pockets to firmly shore it up.

On Tuesday last week, the Central Bank sold dollars to the markets in a bid to float the sinking shilling. Effectively, the unit gained marginally to Sh96.50/96.60 range. On Friday, the Central Bank quoted the unit at Sh96.15 to the dollar.

In the long run, this trick of releasing dollars into the market hardly stops the downward trend of the shilling. “Aren’t we depleting our reserves when we do this? What is the end game to all this?” Asks Mr Kisero.

According to Mr Bodo, commercial banks should work out a kill switch that will stem speculation whenever the shilling depreciates by over one per cent intra-day in the interbank market.

“Commercial banks’ net open positions should be narrowed to five per cent of core capital from the current 10 per cent,” he adds. 


experts take on shilling

Releasing dollars into the market hardly stops the downward trend of the shilling: “Aren’t we depleting our reserves when we do this? What is the end game to all this?”

Nation economic affairs editor Jaindi Kisero


A weak shilling doesn’t benefit the Kenyan economy: “A weak currency is a double-edged sword to our economy, unless we’re to be as big in exports as Germany. Currently, we’re losing more because we’re being forced to pay more.” 

Economic analyst Aly Khan Satchu


Wednesday, May 20, 2015

My dream job is transforming addicts

Mrs Elizabeth Koimet, the Serenity College director during the interview at the Gilgil Campus. She quit her job as a deputy director at Teachers Service Commission to start a rehabilitation centre. PHOTO | SULEIMAN MBATIAH

Mrs Elizabeth Koimet, the Serenity College director during the interview at the Gilgil Campus. She quit her job as a deputy director at Teachers Service Commission to start a rehabilitation centre. PHOTO | SULEIMAN MBATIAH 

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Elizabeth Koimet had seen a hard-working colleague lose job even as others languished in poverty after being sacked due to alcoholism.

Pushed by the unravelling disaster, she caught her colleagues and family off guard when she announced her plan to quit her high-paying job to start a rehabilitation centre.

“A big number of teachers were interdicted and eventually sacked due to addiction. No one seemed to offer help. Chasing them away gave them a better platform to drink themselves into a stupor leading to death,” said the former Teachers Service Commission deputy director, a place she had worked for over 10 years.

And in 2013, Ms Koimet turned her house in Nairobi into a rehab. She was embarking on a tough mission of tackling a scourge that continues to wreak havoc in many homes head on.

“I had a dream of transforming lives of drug addicts that cost jobs and lives and I’m happy I’m doing something to recover some of the condemned people,” she said.


With her house turned into a rehab, Ms Koimet says she was not sure whether her husband would support her when she ushered in her first two clients, whom she counselled back into good life – single-handedly.

“At first, I was not sure how I would break the news to my husband. I started with two people, who stayed in my house in Nairobi, but I did not tell him at first as he was away on duty most of the times,” she told Money.

She says from her survey, the need for a rehab was so high, especially for professionals, who suffer silently since they are ashamed of disclosing their condition to anyone.

“My target group is professionals and I started off quietly with only a handful of contacts,” she adds.

When I finally told my husband that I wanted to resign from TSC to start a rehabilitation centre, I was shocked because he was in full support of the idea, she noted.

In 2013, Ms Koimet opened Serenity Rehabilitation Centre, in Lanet, Nakuru County, where she has employed a team of counsellors.

Ms Koimet pointed out that the most common form of drug addiction is alcohol and its enticing adverts on television and radio leave many with no choice but to seek the “joy of the imbibers.”

“Through research, I established that 90 per cent of the addicts started abusing drugs back in primary school and were introduced by friends or close family members,” she added.

At a fee of Sh2,000 per day, her rehab centres, Nairobi and Lanet, counsel alcohol addicts.

The process takes 90 days where one undergoes counselling and detoxification while users of hard drugs take up to six months. “Hard drugs such as cocaine and heroin take a long period to detoxify.”


In the course of rehabilitation, many addicts come out with skills since some of them either dropped out of college or secondary school.

“I introduced a system where we could equip them with skills such as hairdressing, making of food and beverages as well as computer skills,” she says.

At the moment, the centre has 29 patients, many of them youth from all over Kenya.

“We’ve also handled doctors, who suffer from drug addiction. This is basically the self-prescribed medicine while they are on duty,” she said.

Since the start of her rehab work, over 200 patients have successfully gone through the system and are now free from the various forms of addictions.

A recent survey by the National Authority for Campaign against Alcohol and Drug Abuse indicates that over 2.2 million Kenyans are addicted to alcohol and substance abuse. The survey suggests that substance abuse and addiction has a profound negative affect on the workplace.

This is in terms of decreased productivity and increased accidents, absenteeism, turnover, and medical costs.

This remains as major challenge as the number of alcohol and drug addicts rise with only four government rehabilitation centres in Kenya.


Wednesday, May 20, 2015

Clinic where doctors access X-ray reports round-the-clock

Ms Nyokabi Kaguthi, the owner of Africa Telerad, a start-up that specialises in interpreting X-ray images.  PHOTO | JEFF ANGOTE

Ms Nyokabi Kaguthi, the owner of Africa Telerad, a start-up that specialises in interpreting X-ray images. PHOTO | JEFF ANGOTE 

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Ms Nyokabi Kaguthi runs her dream shop a field dominated by male medical practitioners. She is the founder and director of Africa Telerad, a startup that provides medical diagnostic reports.

Her mission began in 2011 with Sh2 million savings. The plan was to help provide affordable medical care in Kenya and then expand into East Africa.

“The start of the business was slow. Africa Telerad was geared towards lowering the cost of radiology services, improving access and maintaining a high quality of healthcare,” said Ms Nyokabi, a specialist in diagnostic imaging and radiation medicine.

The benefits and potential impact of her business model in the long run was easy to sell, especially to hospitals and health professionals. As a result, the number of business deals has been on the rise.


Before opening Africa Telerad, Ms Nyokabi had worked as a radiologist at the Nairobi Hospital for three years. Prior to that she was employed as a medical officer at the Aga Khan University Hospital. She was posted at New Nyanza Provincial General Hospital immediately after completing her medical degree.

She had the passion to venture into imaging field, with particular focus to web technology that was fairly new when she opened shop. Her focus was to help cut drastically the time used doing X-ray and other imaging services so as to save lives.

So, in 2011, she quit her job to launch her business, which is currently based in Kilimani, Nairobi. Among the strategies she used to get an edge in the field were providing fast radiology services and lowering the charges.

However, it took close to a year to stabilise and get good returns, “it was a tough one year but there was no turning back so together with my team, we stayed focused.”

The venture has since grown and currently covers 32 hospitals and diagnostic clinics in East Africa.

The firm’s core business is to interpret X-rays, Ultrasound scans, CT scans, and magnetic resonance imaging (MRIs) in order to help doctors treat patients. The process is web based. It starts when a technician in a hospital performs an examination. Details of the examination are then sent using a secure network to a team of radiologists at Africa Telerad, who interpret and send a report back to the hospital.

To get quality medical reports, Ms Nyokabi partnered with a team of radiologists. The team, which analyses the images send by doctors within an hour, usually works round-the-clock.


In emergency cases, lives have been saved because of the short time taken to analyse images, she told Money.

“Our radiology services have had a direct impact to over a million people so far by improving access to quality and affordable services,” said the employer of three radiologists.

The centre produces about 60,000 medical reports per year. On average, one pays between Sh300 and Sh500 to get an imaging report. A patient pays the charge through cash or insurance as part of the hospital bill.

Many hospitals usually charge between Sh1,000 and Sh1,500 for similar reports.

Kenya has less than 150 radiologists with most of them based in big towns. This is one of the challenges that inspired Ms Nyokabi to open a one-stop stop, where hospitals could access imaging reports fast.

“The ratio of skilled medical professionals to patients currently stands at one doctor per 10,000 people, which is way below the World Health Organisation recommended ratio,” she said, adding, “the impact and benefits of technology in medicine has immediate positive impact on health.”


Wednesday, May 20, 2015

How drought gave Mwea farmers new income stream

Rice farmers move hay from rice straws at Mwea irrigation scheme in Kirinyaga County on February7, 2015. Rice farmers in Mwea are making good returns from rice straws, which they used to burn previously thanks to livestock herders from arid areas, who came looking for animal feed three years ago in the area. PHOTO | JOSEPH KANYI

Rice farmers move hay from rice straws at Mwea irrigation scheme in Kirinyaga County on February7, 2015. Rice farmers in Mwea are making good returns from rice straws, which they used to burn previously thanks to livestock herders from arid areas, who came looking for animal feed three years ago in the area. PHOTO | JOSEPH KANYI 

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Rice farmers in Mwea are making good returns from rice straws, which they used to burn previously.

Thanks to livestock herders from arid areas, who came looking for animal feed three years ago in the area, the farmers have established a new income stream.

Like desert locusts in search of food for life, herders from Isiolo, Garissa, Marsabit and Moyale invaded the rice farms in 2012, and pleaded with the farmers to let them take the straws or buy them in order to save their stock.

This served as an eye-opener for the locals, who started making hay and selling it at a profit.

Since then, usually busy Embu-Makutano road has been the meeting point for buyers and sellers.


Some farmers now say that the hay is even more profitable than rice. A bale goes for Sh200 earning a farmer Sh150 profit. In a good day, one can sell 50 bales, minting Sh7,500 profit.

“We hire machines and the owners charge us Sh50 to make one bale,” a farmer, Mr Peter Muthike, 38, said.

Mr Muthike said the new trade has helped him a lot in raising school fees. “As for me, it is double profit. After harvesting rice, I sell my produce. What remains are the rice straws, which I turn into hay for sale,” he added.

Ms Sophia Wambura said her regular customers come from Isiolo and Meru.

“To me, this is a good business and I’m not giving up any time soon. Customers queue to buy hay and my only task is to make as many bales as possible and receive cash.”

For Ms Wambui Gatimu, hay provides her with business all-year-round. She is now able to provide food, clothes and raise more money her children’s school fees.

“I’m in business all seasons because I stock enough rice straws, which I use to make hay. When I do not have straws, I buy them from my colleagues, who have many rice fields,” she said.

Agricultural researcher, Dr Raphael Wanjogu, said farmers can make a fortune out of rice straws.

“Rice straws make good hay for livestock and farmers are capitalising on them. Farmers have become enlightened and are doing good business in the scheme,” he said.

Dr Wanjogu, who is in charge of Mwea Irrigation Agricultural Development Centre, has urged the farmers to keep up the spirit.


Wednesday, May 20, 2015

Six tips to boost your SME sales

We all plan to increase the our business revenues every day. Every business owner hopes that the sales will take an upward trajectory. PHOTO | FILE

We all plan to increase the our business revenues every day. Every business owner hopes that the sales will take an upward trajectory. PHOTO | FILE 

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We all plan to increase the our business revenues every day. Every business owner hopes that the sales will take an upward trajectory.

If your sales can go higher than the previous day each day, it would sooth you.

But, how can you make this happen? Here are some valuable tips:

One, add complimentary services to your existing products. A complementary good is one whose use is related to the use of an associated or paired one.

For example, assume that you lease out tents at events. It follows then that people who will attend the event will need chairs or even food. It would make sense to compliment your tent-leasing business with chair-leasing or outside catering enterprise.

Look at your business, how do people consume your product or service?


Where can you add value to derive more revenue?

Two, expand your market reach. Many SMEs tend to pay attention only to their immediate surrounding.

While it is good, you may have other ready customers just outside this zone. Take for example a business located in Nairobi, you may find quick customers in Thika or Machakos by just venturing a little outside your catchment zone.

Say you distribute paper in the city, you may find very many willing customers in the town just 20 kilometres from your central location.

Three, consider bundling products. Let’s say you sell suits for men and you are doing great at that.

Consider bundling offers where the suits with shirts, ties or shoes and offering the package at a reduced price compared to purchasing the products separately. This way, you get a higher profit margin.

When you sell products that naturally go together, or are used for the same task or at the same times, consider selling them as a package.

Four, offer special discounts and properly market the discounts. There are many ways to offer discounts.

For example, quantity discount is when a customer enjoys a price reprieve when two or more items are bought together. Bundle your discounts based on the bundling strategy we discussed above.

Seasonal discounts are offered say during back-to-school or Christmas periods. Stripped discounts, where something may have less features than the ordinary one.

Five, rev up your brochures, presentations, catalogues, flyers or banners to bolster sales. A vibrant, bright-coloured document complete with drawings and pictures draws attention and generates excitement.

Dull materials are typically trashed without a second thought. Review your sales materials, item by item, to see whether they convey the image and message you want to present to your customers.


Do they adequately portray the advantages of your products by linking features to benefits?

Do they convey a sense of urgency with easy instructions for purchase?

If your presentations, product data sheets, pictures, or website don’t simply and clearly present information, which will spur your prospects to take action, it’s time to redesign them.

Six, you can incentivise your sales force by rewarding the superior salespeople with higher commissions.

A compensation plan of this sort aligns the company’s and the salesman’s interest.

The promise of an even higher income as sales grow is a powerful incentive to make more sales.

For a temporary boost in revenues, create a sales contest where the salespeople compete for a cash prize, a luxurious trip, or some other desired perquisite if they reach a targeted level of sales or new accounts.

If successful, follow one contest after another with a different prize each time.


Wednesday, May 20, 2015

Signs that you should quit your job

And while there are many reasons for staff to quit, it can sometimes be difficult to decide. There are vital warning signs that you should look out for. PHOTO | FILE  

And while there are many reasons for staff to quit, it can sometimes be difficult to decide. There are vital warning signs that you should look out for. PHOTO | FILE   


Quitting a job is a big decision for most individuals.

And while there are many reasons for staff to quit, it can sometimes be difficult to decide. Here are vital warning signs that you should look out for:  

Staff are no longer valued

One of the main “benefits” companies realise from a merger centres around the fuzzy corporate buzzword “synergy,” which is the antiseptic-sounding catchword for layoffs.

While reductions in force (RIF) are part of virtually every business, dignity and respect need to be a part of every RIF.

If they are not, consider looking elsewhere even if you are not laid off. 

Growing incompetence

All too often, organisational cuts go too deep, taking out linchpin individuals as well as unsung individual contributors, who do the job of multiple people.

When those superstars exit, the shortcomings of remaining underperformers become more pronounced.

Organisational upheaval tends to reveal organisational incompetence.

While it’s important to allow for a time of transition, if the incompetency increases after six months, a refresh of your resume might be in order. 

Your boss is clueless about the business

One of the most unfortunate aspects of a transition is when your incoming boss doesn’t understand the nature of the business, customer needs or your role.

The fortunate thing is that you can usually decipher this particular sign pretty quickly, which can help shape your ultimate decision to stay or go. 

Advancement opportunities are blocked

This is an unavoidable reality that occurs with mergers.

Typically, open opportunities at the acquired company are filled by individuals from the acquiring company, who need to be “protected” for some odd reason.

If your company gets acquired and vacancies within your organisation are artificially stuffed with folks from the acquiring firm, it’s a tell tale sign to seriously consider a proactive career change.

Your advancement options are limited if you stay. 

Development programmess are cut

Frequently, in the rush to realise cost reductions, early casualties are education benefits, career training or even long-term incentive plans.

Dismantling of those types of employee-focused programmes for the sake of costs is usually a bad long-term sign. 

More work, less reward

It’s an acquisition axiom that once the cuts have occurred at a company, the volume of work doesn’t decrease proportionately.

By definition, a synergy occurs when productivity improves at a lower cost. While that sounds great to the investment community, the actual implementation is very demanding on the remaining employees.

The employees who still have jobs usually get the added workload of excised personnel, without a commensurate increase in salary, title or influence.

Once you’re forced into that role, the outcome tends to be physical and emotional burnout.

To avoid that, it’s important to quickly recognise the unsustainability of that arrangement and quit.

These signals are not exhaustive nor unique. They can, and do, occur at organisations at anytime.

While one or two of these signals might be the post-recession “new normal” for your organisation, if you see a majority or all of them in place for several months a career assessment is probably in order.


Wednesday, May 13, 2015

How to negotiate for higher salary in a job interview

According to Perminus Wainaina, the managing director of recruiting firm, Corporate Staffing, it is easy to come out as money-oriented rather than skills-oriented during salary negotiations. PHOTO | FILE

According to Perminus Wainaina, the managing director of recruiting firm, Corporate Staffing, it is easy to come out as money-oriented rather than skills-oriented during salary negotiations. PHOTO | FILE 

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Peninah Mumbi had just secured a job interview at a Nairobi-based telecommunications company in March 2014.

The post, IT officer, would have been her second job after graduating with a diploma in Information Technology in 2009. And although the firm was offering Sh60,000 salary, Ms Mumbi, 34, was asking for a minimum of Sh80,000.

“I was convinced this was the salary I needed to accommodate my lifestyle in Nairobi,” she says. During the negotiations, she was asked why she needed a salary higher by Sh20,000. “I simply told the interviewer that it was what would be rightfully due to me. It was what I needed,” she confides.

Despite her former employer recommending her for the new post, she was not hired. “I was not asked to wait for a feedback. Instead, the potential employer termed my salary demand as greedy,” she says.

Granted, many job seekers often find themselves in similar circumstances. In any case, many interviewees do not know how to pitch their case for new and better pay, and those who do often find themselves walking in Ms Mumbi’s shoes.

According to Perminus Wainaina, the managing director of recruiting firm, Corporate Staffing, it is easy to come out as money-oriented rather than skills-oriented during salary negotiations. “If you ask for too much (salary), and remain adamant about it, your employer will be left wondering if you are coming in to deliver or to milk the company,” he says.


According to Mr Wainaina, framing your pitch starts long before you meet your potential employer.

“You must begin by understanding the industry, the size and position of the firm you’re engaging with. For instance, if you are an accountant, you cannot pitch for the same salary at an SME looking to hire an accountant as you would a multinational looking to hire an accountant,” he says.

Further, Forbes notes that you should not start to ask for higher pay once you get the actual offer. “When you get the actual offer, you’re in no emotional shape to negotiate. All that your mind has is the new offer, which you want to lock up.”

Although potential employees fear that their prospective employer will rescind the decision to hire them if they ask for a higher pay, Forbes adds that this doesn’t happen 99 per cent of the time.

“Ask for some time to settle without showing signs of withdrawal, doubt, disinterest or disrespect. Then use this time to research on how the company pays. This should help you come up with a more realistic figure as well as help you respond to questions on why your salary should be higher than someone else’s.” In the same vein, you will come across as better prepared.

Mr Wainaina agrees, adding that after grasping the scope of the firm, the key to unlocking a bigger pay will be in how you expound on your skills.

“You must prove that what you are going to bring the firm is value addition and nothing else. If you are an accountant and you’re well acquainted with Kenya Revenue Authority, you may consider elaborating on how you can bring your experience on board to align the firm’s books with KRA’s policy more smoothly and cost-effectively,” says Mr Wainaina. For instance, if you are a receptionist, you can show how you are able to market the company.

From experience, Mr Wainaina observes that an employer will hardly reject you just because you requested an additional Sh10,000 on your stated salary.


Nevertheless, negotiating for a better pay is a delicate balancing act. “If the employer is offering Sh100,000 and you demand Sh120,000 without explanation on what you’re bringing to the table, your potential employer will most likely flee thinking you’re greedy!” cautions Mr Wainaina.

Quintessential Careers, an online job-seekers’ portal, echoes Mr Wainaina’s sentiments: “The most common error people make is focusing on need or greed rather than value. You’ll be seen as greedy or needy if you focus solely on what you feel you need or deserve rather than your value and the value you’re bringing.”

According to James Njenga, a financial coach based in Nairobi, you will do well to approach a pay negotiation using a competitive strategy.

“Generally, people who use a competitive strategy by identifying their goals early on and having the spine to try and push for them get significantly higher salaries than those who sit back and compromise on their pay plan.”

He adds that you shouldn’t be afraid of articulating your pay concerns during the negotiations. State them clearly and at once. Quintessential Careers notes that you should be careful not to reveal to your employer what you would accept.

“Some employers will ask for a salary history or salary requirement. Others will ask during a preliminary interview or on the job advert what salary you’ll be expecting. But realise that the earlier you divulge this information, the less room you’ll have to ask for a better pay when the actual offer is put on the table.”

This is the mistake that Lawrence Musyoka made. “My employer had advertised for a vacancy in the accounts department. He had stated that I needed to state my current pay and what I expected to earn. I stated my net pay of Sh45,000 and an expectation of Sh70,000 net pay,” he says, adding that his employer took him to task on why his pay ought to be nearly doubled.

“I had little space to negotiate and since I needed the job, I accepted the Sh48,000 he offered.”


Alarmingly, the hardest hit in the search for better pay are the fresh university and college graduates. Previously, the Federation of Kenya Employers has lamented about a skills gap among college leavers seeking jobs.

Candidates seeking high pay at the entry level are likely to get raw deals, says Mr Wainaina. “College leavers have nothing to prove. They are just stepping into the market and will inevitably be viewed by the employer with a lot of scepticism,” he says. “Their only stronghold is in how they demonstrate their ability to adapt, learn and build a portfolio.”

Strikingly, there are some workers, who get raw deals after leaving previously high-paying jobs.

An employee will only receive a poor pay at another company if she or he does not have a career plan, notes Mr Wainaina.

“Many of our current professionals have no career plan. In many cases, this proves to be the weak link when moving from one company to another and subsequently when negotiating for a pay,” he observes. 

Negotiating for a better pay is  a delicate balancing act. However, whereas experienced workers have skills to prove, fresh graduates face an uphill task.

Job recruitment expert Perminus Wainaina says entry level candidates seeking a high pay are likely to get a raw deal.

“College leavers have nothing to prove. They are just stepping into the market and will inevitably be viewed by the employer with a lot of scepticism,” he says. “Their only stronghold is in how they demonstrate their ability to adapt, learn and build a portfolio.”        


Wednesday, May 13, 2015

Hold KCB, sell KQ and buy Safaricom

An investor being at the Nairobi Securities Exchange. According to Genghis Capital, Safaricom stock is a buy. Last week, the telco posted record Sh32 billion profit for the financial year ended March.  PHOTO | FILE

An investor being at the Nairobi Securities Exchange. According to Genghis Capital, Safaricom stock is a buy. Last week, the telco posted record Sh32 billion profit for the financial year ended March. PHOTO | FILE 

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KCB: This stock is recommended as a hold with a target price of Sh65.22 per share.

According to ABC Capital, the stock has an 8 per cent upside potential.

“We remain optimistic about KCB given that the bank is a consolidation of its businesses in the region and is also leveraging on technology to offer banking services to the populous while minimising the unit cost of delivery,” said ABC in a market report.

This recommendation comes hot on heels of KCB’s first quarter results, which the bank posted a 12 per cent net profit increase to Sh4.3 billion.

The results saw the bank edge out Equity Bank in the profitability race. Equity Bank has posted a Sh4.2 billion net profit for the period under review. The bank’s net interest income shot upwards by 11 per cent to Sh9.3 billion from Sh8.3 billion.

According to ABC Capital, KCB continues to remain strong on all prudential ratios. “KCB is also gearing itself to deliver balance sheet growth and shareholder wealth in the short- to medium-term by leveraging on technology and partnerships with telecommunication companies to launch innovative products.”

The stock opened at Sh59 per share on Friday after closing at the same price on Thursday.


Safaricom: According to Genghis Capital, Safaricom stock is a buy. Last week, the telco posted record Sh32 billion profit for the financial year ended March.

The firm also revealed that the tenure of current CEO Bob Collymore had been extended by two years. According to Mr Kevin Tuitoek, a research analyst at Genghis Capital, this will work well for the telco.

“The extension is a positive indication of business continuity,” he says, adding that the stock has a strong upside potential due to Safaricom’s innovation in a bid to remain dynamic. This is going to be the key drive that will prop up Safaricom to strong position in the market.

“The company’s prospects of attracting higher revenues from data are high with the roll out of 4G network and expansion of its 3G network in rural Kenya,” says Mr Tuitoek.

The company expects to roll out 4G network by end of this year.

Safaricom shareholders are set to take home the biggest dividend payout in Kenya’s history amounting to Sh25.64 billion. Retail shareholders will pocket Sh0.64 dividend per share up from Sh0.47 they received in 2014.

On Thursday, when the results were released, Safaricom traded 19.809 million shares. The stock closed at Sh17.15 apiece. 


Kenya Airways: The stock opened at Sh7.10 on Friday, a Sh0.05 drop from Thursday’s closing price.

Over the past one year, KQ has touched a low of Sh6.70 apiece and a high of Sh13. According to Ndindi Nyoro, the head of Investax Capital Limited, the national carrier is expected to suffer a loss of between Sh14 billion and Sh20 billion for the financial 2014.

Genghis Capital advices investors to sell this stock. “Over the short-term, we project a sell. The company’s earnings are going to dip,” says Mr Tuitoek. He is nonetheless quick to note that the Dreamliners leasing deal is positive news for the ailing carrier.

“With the swapping of the Dreamliner purchases for a leasing programme, the financial restructuring programme is positive indication of good financial fundamentals,” he says.

“The deal should mitigate accelerated accumulation of debt, acting as a win-win whereby it allows the company to continue its expansion programme whilst easing balance sheet pressures.”


Wednesday, May 13, 2015

Stimulating your staff productivity

The productivity and discipline of many staff is a big challenge to many business owners. It pains when you have a huge payroll bill but you are not getting value from this expense line. PHOTO | FILE

The productivity and discipline of many staff is a big challenge to many business owners. It pains when you have a huge payroll bill but you are not getting value from this expense line. PHOTO | FILE 

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We cannot do everything in our businesses alone. It is for this reason that we keep hiring staff.

How do you ensure that you are getting true value in terms of productivity from your staff?

I have seen a new employee culture especially with the younger generation of workers where people want to earn more, but do less.

Employees of SMEs want the benefits offered by the bug firms. The trouble with push is that few can actually defend their true value to the business.

Some of them are scheming everyday to see what loophole they can exploit in the business. Many people say Kenya has a great human resource base, that may be true.

However, the productivity and discipline of many staff is a big challenge to many business owners.

How are you dealing with these challenges? It pains when you have a huge payroll bill but you are not getting value from this expense line. The labour unions have argued that a worker’s productivity should not be tabled when discussing wage increments.

Then, by all means, they should consider discussing job losses when they raise the issue of wage increments.


Businesses cannot afford to keep increasing wages without a matching increment in productivity and revenues. Salaries are earned, not given.

One of the things that is interfering with employee productivity is new technologies.

With almost everyone owning a smartphone and many offices enabled with wireless Internet, staff get a lot of distractions. From social media to WhatsApp, some workers spend more time on their handsets than on office computers.

As an employer, you need to set rules around this. People must respect working hours and spend that time doing what they are paid to do. If you can, turn off Facebook, Twitter, YouTube or even WhatsApp on your Internet router or server.

Otherwise, embrace the technologies for business use. For example, adopt social media marketing for your business and monitor it to get true value.

The truth, although it is good to respond fast to communications, if you are not careful with them, they can take away lots of valuable business time and negatively impact productivity.

As a business owner, you may also want to invest in surveillance cameras in your premises.

These prompt the workers to be more responsible and productive. When you know that the big brother is watching, there will be less idle chitchats. Surveillance can also prevent losses.

If someone knows that they can be seen slipping business assets into a bag, they will be try not to do it. If you notice a hostile reaction when you install a surveillance camera in the office, you can be sure that a lot has been going on behind your back.

This has happened to me! The knowledge that the employer is watching at all times can, in itself, inspire better performance and improve productivity without the need for unpleasant confrontations.


A happy staff is a productive one. However, this depends on the employee’s attitude, too.

Investing in compensation strategies such as pay rises, bonuses and enhanced benefits can be quite expensive and is a route that can backfire.

As an alternative, think through win-win strategies. Benefits that may not be expensive but may actually help in increasing the business profit margins.

You can also try our team building events to enhance bonding between the employees and performance-based benefits.

Give recognition, for example, for exceeded sales targets or cost-cutting ideas that bring returns.

You can also allow people to come up with new product or marketing ideas and provide a recognition even if it is not monetary.

Anything that would make the person feel valued.

However, be very careful not to create an entitlement culture in your business where employees begin to count chickens before they hatch.

Keep re-evaluating your strategies around employee productivity to ensure that you are dynamic enough for the benefit of your business.


Wednesday, May 13, 2015

How I grow tidy sum of money on trees

Mr Roddrick Ambuka tending his seedlings at his nursery in Luanda, Vihiga county. PHOTO | DENNIS LUBANGA

Mr Roddrick Ambuka tending his seedlings at his nursery in Luanda, Vihiga county. PHOTO | DENNIS LUBANGA 


Like many youth, who travel to Nairobi in search of jobs once they complete secondary school, Mr Rodrick Ambuka made his journey to the city in 1986 to seek employment.

Luck was on his side: “I got hired at an engineering firm, Burns and Blair, which exclusively dealt with agricultural implement.”

Hired as a sales person, Mr Ambuka started honing his skills. “I would go for lessons in accounting to learn how to run a business since I wanted to become an employee, who is conversant with the job.”

But five years into his job, he resigned and opened his entity, Roddy’s and Toro Company, a start-up that was set to compete with Burns and Blair.

“It was quite easy to run a business since I had a prior knowledge,” says the 50-year-old, who also runs other enterprises in hospitality and construction industries.


However, it was in Nairobi that he noticed one peculiarity about Kenya’s housing sector.

“I noticed that the wealthy lived in suburbs with a good environment, with plenty of trees, which is appealing unlike the areas where the low income earners resided. That is how I started loving trees,” said the proprietor of Roddy’s Eco Cover, a company which sells seedlings.

His passion for the environment drove him to start the project in 2011 with 1,000 seedlings.

“The demand peaks ahead of the rainy seasons from April where we sell an average of 50,000 seedlings in a good month making about Sh500,000.

“We have a client who bought 20,000 seedlings from the county of Kajiado and asked us to plant them on her land,” says Mr Ambuka, who has close to a million seedlings in his nursery at any given time.

His empire is now crossing borders. Already, he is processing an order to supply 6,000 seedlings to a customer in Uganda.

“I always believe that trees are wealth because if you plant one, which costs just Sh10, in the next 10 years, the least you can earn from it is Sh60,000,”

Buyers stream from the counties and devolution has proved to be a blessing for him. “We’ve sold our products to Bungoma, Busia and Kisumu counties. We’ve received a tender to supply 50,000 seedlings to the county government of Vihiga.”

To maintain quality, the entrepreneur buys certified seeds from Kenya Agricultural Forestry Research Institute (KEFRI) for both exotic and indigenous tree species such as Jacaranda, Elgon teak, Grevellia, Neem, and fruit trees, which he plants in black polythene bags.

“The locals used to trek as far as KEFRI/Kenya Forest Service offices at Maseno, about 10 kilometres from Luanda town, to buy seedlings because there were no nurseries around here and that is how we thought of starting our own in 2011.”

Mr Ambuka, who has employed 40 workers, says “indigenous trees are more expensive compared to exotic ones. Indigenous trees can fetch up to Sh200 because they take time to break seed dormancy.”

His vision is being the main player in the county like Kenya Forest Service is to the State in helping improve forest cover in western and Nyanza, where deforestation has hit large tracts of land.


“Last year, we sold about 500,000 trees, ornamental plants and fruit seedlings of about 20 different species to schools, churches, colleges, NGOs and county governments.” Mr Ambuka, who rides on the slogan; “trees are wealth”, also donates seedlings to schools so as to train pupils on the importance of conservation.

He attributes the success of his project to hiring of a team of professionals. For instance, he poached the farm manager, Mr Felix Ngome, from Kenya Forest Service.

Mr Ngome offers free counsel to customers on the kind of trees that can do well in specific regions.

The green enterprise, whose annual turnover is over Sh5 million, has caught the government’s attention through the ministry of Environment when it assessed its capacity and awarded it a tender to plant 25,000 trees in the depleted Buyangu hills forest.

As part of the project’s corporate social responsibility, the shrewd businessman uses his proceeds to educate five bright students mainly from needy families.


Wednesday, May 13, 2015

Bold investor creates jobs in slums, turns waste into cash

Mr David Aurobach, the brains behind Sanergy Fresh, a firm that collects human waste in Mukuru Slums and turns it into organic fertiliser. PHOTO | COURTESY

Mr David Aurobach, the brains behind Sanergy Fresh, a firm that collects human waste in Mukuru Slums and turns it into organic fertiliser. PHOTO | COURTESY 

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A short walk in Mukuru slums, in Nairobi, paints the picture of a people living in squalor.

However, new blue structures in the slum are now commonplace. They are part of the 680 Fresh Life Toilets by Sanergy, a venture that seeks to create jobs and mint millions of shillings from waste.

Sanergy co-founder David Auerbach says the project, which started three years ago, has employed 700 slum dwellers.

“We’ve a vision to grow several entrepreneurs, who can operate more Fresh toilets in the slums, earn decent money and create jobs. We design and build the urine diversion dry toilets and sell them to operators, who we train and sign  franchise agreements with to ensure that quality is not compromised. We hope to double our rate, which is currently 40 toilets per month,” Mr Auerbach told Money.

Entrepreneurs, who want to begin running the toilets invest Sh50,000. Sanergy has since come up with a credit option to support buyers who pay back in 24 months.

The toilets are designed with two catridges to collect human waste. No water is required to flush the toilet, instead, saw dust is used and suppliers of both saw dust and tissue paper are now a happy lot.

A sack of saw dust, which was previously burnt as waste, now goes for Sh150. The locals call it “toilet disinfectant”.


A team of collectors pick the cartridges every morning and replace them with clean ones. They wear a protective gear, are inoculated and have a health insurance. They cart away the waste to collection centres where it is transported in trucks for processing into organic fertiliser.

About 7.5 tonnes of waste is collected daily from the slum, Mr Auerbach, who is responsible for raising capital, business development and building partnerships says.

There are plans to engage mobile toilet dealers and the counties to harvest more waste for processing of fertiliser.

“People think they are carrying water, milk or juice because we have ensured that they are very clean. It is our environmental health commitment and they have been trained to keep it. We’ve some samples also taken to our labs for analysis so that we process them for maximum use as organic fertiliser,” he said.

Since the first toilet was installed on World Toilet day, in November 2011, the numbers have been rising. About 40 new units are set up per month. They are projected to hit 1,000 in total by end of this year.

Ms Esther Munyiva has been running one of the toilets. She says the toilets have transformed socio-economic lifestyles with “flying toilets” slowly becoming a thing of the past.

“This place was so bad with human waste in polythene bags thrown all over. You see, today there is no excuse to do that when we’ve this facility here. I get up to 100 users on a good day and people like the cleanliness and the mirror at the door. I was also forced to lower the charges from Sh5 to Sh3 following pleas from my customers,” Ms Munyiva said.

Sanergy recommends Sh5 but leaves the price setting to market dynamics. The firm now plans to venture into Mathare and other slums even as it woos schools, bars and lodges.

With about 60 per cent of Nairobi’s population living in slums, which occupy less than six per cent of the city’s residential land, sewerage systems, piped water and gabbage collection in the slums is stretched to the limits. Slum dwellers are forced to pay for services, which people in affluent areas of the city take for granted.

An Amnesty International survey on 130 women living in four slums in Nairobi, including Mukuru, in 2010, it was established that shortage of toilets and places to wash in the slums heighten the risk of gender-based violence against women.

Mr Auerbach says after graduating from Massachusetts Institute of Technology (MIT), Mr Ani Vallabhaneni, Mr Nathan Cookie, Ms Lindsay Stradley and himself proposed the idea and won a cash prize.


The team then raised about Sh50 million and carried out a research in the slums where they realised that the sanitation facilities were lacking yet locals were willing to pay to access even the available inferior options.

“We came up with a design that needed no water, was easy to use and easy to install. We also took the task of waste collection and trained our operators as well as ensured the standards including the provision of hand washing and tissue paper was enforced, the brand is now self-expanding,” he said.

Over 30,000 people in the slums use the toilets every day earning the dealers about Sh200,000 in revenue.

The organic fertiliser is supplied to farms. “We’ve just started in Nairobi where over two million live in informal settlements that means we can still scale up and we’ve a long way by the time we cover the eight million, who live in such settlements countrywide,” said the MBA holder from MIT.

The enterprise was nominated by SAP as proven business model with potential to scale and outlook for job growth and social impact.

Mr Auerbach will join CEOs from selected companies in East Africa, who will participate in a 100-day fellowship programme at Silicon Valley, in July.


Wednesday, May 13, 2015

How to be the best consultant

It seems like a great career path. But consulting, as it turns out, isn’t sexy, glamorous, or easy. It’s harder than you might think. PHOTO | FILE

It seems like a great career path. But consulting, as it turns out, isn’t sexy, glamorous, or easy. It’s harder than you might think. PHOTO | FILE 


Thousands of professionals have dreamed about starting their own consulting business.

It seems like a great career path. But consulting, as it turns out, isn’t sexy, glamorous, or easy. It’s harder than you might think.

Here’s what you need to know: 

1. You’ll face cranky people

If you’re not ready to face unpleasant people, then consulting isn’t for you.

Consulting is a face-to-face business. You meet with people. You sit across tables. You talk to people. And some of those people you talk to are just plain mean.

You figure out pretty quickly who is worth working with and who’s not. As you figure it out, you might have to endure some relationships that eat away at you. 

2. You sell knowledge

A consultant is hired for his/her knowledge. A client selects you because you know something that they don’t.

This means that you tell them like it is, and don’t back down. Deliver the knowledge that they pay for. If they don’t like it, so be it.

Your deliverable is knowledge, and if you deliver it in a half-baked way, you’re losing the quality of your service. 

3. How to charge

Quite often, new consultants don’t charge enough for their service.

Maybe it’s guilt or they just don’t know how much they should charge. There is no magic formula for fee setting, but there is a general rule: charge more than you think you should.

Remember, the higher your rate, the better you look. If you saw two wristwatches, one for $10 and the other for $5,000, which one would you think was superior?

Obviously the more expensive watch is a better timepiece. The same goes for consultants! 

4. Marketing yourself

A consultant must market him or herself. There’s nothing sordid or dirty about this. This is the way the business is done. To successfully sell yourself, here’s what you need to be prepared to do:

• Dress to kill. You’ve got look as good as the services you provide.

• Put a big price tag on yourself. People associate higher cost with higher value.

• Be trustworthy. No one will hire you unless you’re trustworthy. And if they hire you, they won’t take your advice.

• Prove your worth. You can’t just look it; you’ve got to actually be it. Give what you promise, and give it well.

• Think of yourself as a brand. The higher-quality the brand, the better your marketing becomes. 

5. You aren’t your own boss

The myth of consulting is that you are your own boss. You’re not your own boss. As a consultant, your clients are in charge. They own your billable hours and they expect results. Being your own boss extends to your ability to say “no,” discipline yourself to work smart and hard and demand fair fees. Beyond that, you’ve got to work hard for other bosses. 

6. The challenges

Try starting any business, and you’ll have moments of absolute devastation, both personally and professionally.

Consulting can take an emotional toll. That’s a price that you have to pay, but it’s not one that you can accurately quantify or predict.

Regardless of how you respond in the face of challenge, one thing is true: You will face disappointment and failure. 

As awesome as it is, there’s nothing easy about consulting. Now you know the facts. So, roll up your sleeves, grit your teeth, keep your eye on the goal and be the best consultant you’re capable of being


Monday, May 4, 2015

Deaf hawkers defy disability to turn profit

A group of deaf young men hawking smokies on the streets of Kakamega town to earn a living. Many physically handicapped persons have moved from being begging to enterprise to improve their livelihood. PHOTO | ISAAC WALE

A group of deaf young men hawking smokies on the streets of Kakamega town to earn a living. Many physically handicapped persons have moved from being begging to enterprise to improve their livelihood. PHOTO | ISAAC WALE 

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A group of five hawkers has refused to sit back and mourn what to others would have been considered a “misfortune in life.” 

Unable to communicate owing to their speech and hearing impairment, they have become enterprising. 

The group, led by Kevin Ongwalo,34, has turned to selling sausages and “smokies” to earn an income and support their families. 

They wake up early each morning to collect their trolleys at a Farmer’s Choice stockist in Kakamega Town to prepare for the tough and challenging day ahead.

According to Kevin, members of the group assemble outside the stockist’s shop along Sudi road at 6 am to start off preparations for the day. 

They clean their trolleys before getting the day’s supply of smokies before take their positions at their place of work. One cardinal rule the vendors observe is always to stay clean to attract customers. 


The vendors have put stickers on their trolleys indicating the price for the products they sell to avoid misunderstandings with customers. 

Each day the hawkers sell smokies worth between Sh7,500 and Sh10,000. Their customers include university students, boda boda cyclists, traders and people walking by their place of work at the busy bus terminus near the Muliro grounds along the Kakamega-Kisumu road. 

From the amount, each of the vendors make a minimum of Sh500 daily and save part of the cash to invest in project they plan to run jointly in future.

The smokies are popular with people who want a quick bite of the fast selling snack as they go about their daily chores. Other members of the group are Victor Wawire age 23 years, Cornelius Juma 26 years and Edwin Ambani aged 28 years. 

Although deaf and dumb, the group has decided to put their disability behind them and open a new chapter in their lives. 

With the help of a sign language interpreter, Mr Ongwalo said the secret for the good sales they made each day was driven by their affability and astuteness when dealing with their customers. 

“Although we are unable to speak and hear, we have managed to attract customers by being warm to them and friendly as they approach us to buy the smokies,” said Mr Ongwalo. 

According to Mr James Mburu, the Farmer’s Choice Field Sales Manager in Western, Nyanza and Rift valley, smokies unlike ordinary sausages have a longer shelf life and can stay up to three days without going bad. 

He said the company sold more than 50 assorted products which included beef sausages, bacon, ham hot dogs but the smokies were popular with the public. 

He said the company was impressed with efforts made by the group of hawkers who had decided to put their disability behind them and were competing with their colleagues and earning a livelihood from the job. 


The group has started saving part of their income and plans to secure a loan from a financial institution to expand the business. 

Mrs Lilian Muthoni, a shop owner and a stockist in Kakamega said at first she faced challenges when the group approached her to be allowed to sell the products. 

“The situation was complicated by the communication barrier but with time I came to learn some basic sign language and was able to communicate with them with ease,” said Mrs Muthoni. 

She said hade had not experienced any problems working with the group after developing a close working partnership with Mr Ongwelo and his colleagues who refer to her as Mama Baraka (blessings). 

Mr Ongwelo said he has managed to buy a cow to provide milk to his family and augment his income. He now plans to buy a bigger parcel of land for farming.


Thursday, April 30, 2015

How much do loans via your phone cost you?

Lenders are offering varying interest rates for loans borrowed through mobile phone platforms. These services are registering a phenomenal growth. PHOTO | FILE

Riding on the success story of how mobile money transfer service is revolutionizing business, Kenya plans to start selling government bonds and securities to citizens via handsets. PHOTO | FILE 

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Are you a little short on cash? Well, all you need is your handset and a good credit history.

With the introduction of mobile banking, Kenya’s banking industry is transforming and one can borrow as little as Sh50 via a mobile phone to pay bus fare.

The banks have moved with speed to launch mobile banking platforms in a bid to grow their customer base and increase revenue streams. But what’s in it for you the consumer?

A look at the mobile banking services shows just how fast the lenders intend to get new or existing customers take loans with ease.

Gone are the days when customers applied for loans, which would take a long time to process, in the banking halls.

“The fact that a person can now borrow Sh50 to pay bus fare to work or Sh1,000 to pay for electricity without reaching out to friends is in itself liberating,” Kenya Commercial Bank CEO said recently.


According to Co-operative Bank’s retail banking director, Mr Maurice Matumo, mobile banking loan application is fully automated. They are applied for, appraised and disbursed via the phone, he told Money.

“Time span between applications to disbursement is no more than one minute,” Mr Matumo told Money.

For instance, Co-op Bank’s MCo-op Cash give a customer a virtual account with no monthly charges. A customer can operate it without visiting any branch.

In March, KCB launched a mobile phone-based loan product where customers can repay loans at a fixed interest rate of between four and 12 per cent.

These products by Co-op Bank and KCB rival Commercial Bank of Africa’s M-Shwari, which was launched two years ago.

However, with growing appetite for quick, unsecured loans, one needs to know the costs and benefits associated with each micro-loan product in the market. Here are a few: 

M-Shwari (a partnership between Safaricom and CBA)

Launched two years ago, all Safaricom subscribers can access M-Shwari service. Subscribers can save between Sh1 and Sh100,000, and qualify for loans ranging between Sh100 and Sh20,000.

However, the loan depends on one’s previous loan repayment pattern and use of other Safaricom services such as voice, data and M-Pesa.

To qualify for your maiden loan, however, you must deposit money in your M-Shwari savings account. The loan is payable within 30 days and attracts an interest rate of 7.5 per cent. Defaulters risks being blacklisted.

Data released by Commercial Bank of Africa last month shows that it is currently processing about 50,000 loan applications every day.

“Backed by a dynamic mobile phone-based credit scoring system, CBA has extended loans amounting to Sh29 billion, processing an average of 50,000 loans per day over the last two years without demanding security or the need for clients to visit a bank branch to apply for the loan,” CBA chief executive officer Isaac Awuondo said.

For savers, M-Swhari Lock Savings account comes in handy.

“This account allows M-Shwari customers to save for a defined purpose and for a specified amount of time. The funds saved on the M-Shwari Lock Savings account will be kept in the account until the maturity date,” Safaricom notes in its website.

The interest earned in M-Shwari Lock Savings account is varied. For instance, savings below Sh999 would earn you two per cent interest rate per annum while amounts over Sh50,000 attract six per cent interest rate per year.

KCB Mobiloan

Under this product, new customers are registered as part of account opening at branch or by opening M-benki account via handsets. Existing account holders register by completing an application form.

Customers can access a minimum of Sh100 and a maximum Sh20,000 loan. However, the bank says that it is reviewing the range to enhance the loan limit.

The loan attracts 7 per cent interest rate and has one-month repayment period.

KCB M-Pesa loan

The customers opt-in, that is; open KCB M-Pesa account by dialEdwin Dande, ling *844#.  The loan limits range between Sh50 and Sh1 million with interest rates ranging from four, three and two per cent for periods of one, three and six months respectively.

A borrower can opt to pay from the KCB M-Pesa loan on a self-initiated basis before maturity of the settlement period, or let the bank recover the money from the KCB M-Pesa account, upon maturity.

Both products have penalties of up to 10 per cent of the amount borrowed in case of defaults.

According to KCB chief executive officer Joshua Oigara, the loans disbursed since KCB M-Pesa launch in March stands at Sh710,227,883.

“Currently, a total of 1.3 accounts have been opened,” said Mr Oigara added.

Co-operative bank’s MCo-op Cash

Registration can be done at a branch, agent location or by self by dialling *667#.

MCo-op Cash is an independent wallet where customers can borrow a minimum of Sh100 and a maximum of Sh200,000. The loans are applied for, appraised and disbursed via the phone.

One pays between 7 and 10 per cent interest rate depending on the loan type with a one-month repayment period. A borrower can pay off the loan before expiry of term at their own convenience with no extra charge.

“Late payment attracts a fee of six per cent per annum and eventual customer listing on credit reference bureau in case they do not repay,” said Mr Matumo, adding that being a one-month loan, each deal is treated as a separate deal therefore, no top ups.

Equity Bank’s Eazzy 247

To subscribe for the service, a customer dials *247# or accesses it by downloading an application form from the Internet. One then links his/her existing account to Eazzy 247 after which one can use his/her handset to transact.

Equity Bank customers can access these services only when they subscribe to equitel service and get an equitel line.

Eazzy Loan interest rate is two per cent per month of the loan amount on a flat rate with a six per cent per annum late payment fee.

Customers can borrow between Sh500 and Sh20,000. Failure to repay the loan will see a customer blacklisted. 


Thursday, April 30, 2015

Tax on beer hit my firm, I’m scouting for new markets

Ruth Kinoti (centre) with award sponsors from Netherlands. The teacher-turned-social entrepreneur, who Shalem Investments together with her husband. PHOTO | COURTESY

Ruth Kinoti (centre) with award sponsors from the Netherlands. The teacher-turned-social entrepreneur, who Shalem Investments together with her husband. PHOTO | COURTESY 

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Shalem Investments, a Meru-based entity that brings together 7,000 sorghum farmers bore the brunt. The group had found a ready market for the crop at the East African Breweries Limited (EABL).

Shalem Investments partner Ruth Kinoti, who recently won the European Marketing Research Cooperation-Rabobank Project Incubator Award in Kinshasa, says the government did little to weigh the effects the tax would have on the thousands of sorghum farmers.

Money met the teacher-turned-social entrepreneur, who runs Shalem Investments together with her husband.

“I started by supplying maize and beans to schools when I was a teacher using my salary as the seed capital. The demand grew and when I finally resigned and registered Shalem Investments in 1998, the plight of many farmers touched me. I organised them into groups, bought their sorghum, which EABL bought in big volumes,” said Ms Kinoti.


With support from her husband, the mother of two says the business was booming.

Farmers trusted her due to the assured market she provided thanks to the brewer until the government hit low-cost beer business with tax in 2013. The value chain was disrupted and the brewer failed to continue buying sorghum in huge volumes starting January, last year.

“We were stuck with about 3,755 tonnes in the second season of 2014. This was the hardest moment for the farmers,” she said.

EABL had been making Senator Keg beer since 2004 as a drink for consumers wanting to shift from use of home-made alcohol.

The cheap drink was enjoying a tax break until 2013 when the government imposed excise duty hoping to generate Sh6.2 billion.

As a result, the price of Senator Keg rose from Sh20 to between Sh45 and Sh50 per 300ml glass bringing down sales by 80 per cent according to EABL.

The government’s plan to encourage production of low-cost beer made Senator Keg the second-most popular beer in Kenya with a market share of 15.3 per cent. But with the new tax, farmers’ stores began swelling with sorghum.

“If only Deputy President William Ruto, who I have known to be an ardent defender of farmers, knew of the full impact the taxation caused on thousands of farmers, who had invested in sorghum. What is the benefit of cheap fertiliser when there is no market for the harvest?’’ she said.

In many parts of semi-arid Igembe North, Meru County, farmers had embraced sorghum in droves. And with the coming of a ban on miraa (khat) in European markets, Ms Kinoti believes sorghum will be the best alternative.

“There was total transformation in lifestyles. We wrote many cheques to secondary schools. Youths were employed in spraying, harvesting and they had even formed groups through which they saved, and women groups leased land to farmers, transforming many lives.

If there is an initiative of meeting all the Millenium Development Goals in totality, it is in agribusiness,” she added.

At the moment, the enterprise has over 2,000 tonnes of sorghum in its stores.  Muted sales have affected over 20 per cent of the firm’s annual turnover.


However, encouraged by last month’s social agribusiness award, which includes a cash prize of $15,000 (about Sh1.4 million), the former teacher says there is no giving up yet. She plans to mobilise at least 15,000 farmers in 1,500 groups in the next five years.

The pain of a reversed breakthrough in sorghum farming has made her to start thinking beyond the market chain that has since been interrupted.

She has turned to food and feed millers across the country including Unga limited as the main market for her group of farmers.

To augment their earnings, she is urging them to diversify into sunflower farming with oil maker BIDCO providing the market. She is also encouraging farmers to venture into bee keeping.

Asked about the money she won. “I want to set up a small fund to help farmer groups access input loans and depending on how it goes, I will woo more investors to grow the fund bigger. I feel for the poor farmers, who did not even know what the sorghum was being used for but all they knew is that life was being transformed. We have to complete the journey.”

In a deal with 2 SCALE, an agribusiness incubator in Africa, Shalem Investments trains farmers on the best farming practices. This is achieved in cooperation with the ministry of Agriculture and the European Cooperative for Rural Development.

Under Shalem Investments, the annual income for the farmers had hit over Sh400 million. There are plans to raise it to Sh1 billion in the next five years.

The highest earning farmer now makes Sh750,000 per year.


Ms Kinoti says the main motivation for farming is money and not food.

A ready market is therefore as crucial just as the resources dedicated in research for other aspects of good production.

“Policies have to be well thought out. Before looking at any policy, the government ought to look at the entire value chain. Farmers need cheap loans and a reliable market. Every farmer will tell you how much they intend to make, not how much food they expect,” she notes.

She has plans to explore new markets  in China and Dubai for sorghum, green grams and other grains.

The International Crops Research Institute for the Semi-Arid Tropics says sorghum is widely grown as a food crop in sub-Saharan Africa, but commercialisation has proved difficult as growers prioritise household food security.


Thursday, April 30, 2015

We’re betting big on taxi culture to grow start-up

The user interface where customers use to get in touch with Maramoja Transport taxis. PHOTO | FILE

The user interface where customers use to get in touch with Maramoja Transport taxis. PHOTO | FILE 

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When Jason Eisen toured Nairobi in 2010 and then again in 2013, he faced a common problem — transport woes within Kenya’s capital.

Transport challenges frustrated the Washington DC-based consultant prompting him to start sharing his experience with his acquaintances.

“As I discussed these challenges with scores of Nairobians, I quickly began to understand that I was not alone lamenting them. I remember flying back to Washington, DC, after a particularly difficult transport experience here, and on the day I landed, using something like nine different modes of transport, all powered by technology,” recalls Mr Eisen.

At that moment, he began to reflect on how technology could be applied to alleviate some of Nairobi’s transport woes.

Mr Eisen quit his job three months later and returned to Kenya to explore the transport business idea.

“A unique picture began to emerge, of a taxi culture not a taxi market, built around trust rather than anonymity, relationships rather than proximity. A view of taxis as individuals rather than just a function,” said Mr Eisen.


Mr Eisen then joined efforts with Mr Steve Kimani to establish Maramoja Transport. Maramoja was launched at iHub’s five-year tech anniversary, which brought together several technology companies on March 7, this year.

The company, however, had been running for a while before then.

The socially powered transport start-up operates through an app on smartphones, where potential customers view all taxi drivers within their vicinity through GPS before requesting services from one.

The taxi drivers are, however, sourced through referrals from customers, who have used their services before or from fellow taxi drivers.

“Users can quickly request a trusted taxi from their smartphone, seeing exactly where all available drivers are via GPS tracking, and review the driver’s credentials before accepting him,” says Mr Eisen.

According to Mr Eisen, Maramoja has built a network of 150 taxis and private hire drivers around Nairobi and is still adding new drivers every day.

However, Maramoja conducts thorough background checks before adding any new driver to its platform.

“We respect the local taxi culture of trust and referrals and don’t want to force some other country’s taxi habits on Kenya. Instead, we seek to bring technology driven tools that reinforce this culture and make it easier, faster, and safer to move about Nairobi,” Mr Eisen says.

“Any driver that can pass our credentials verification and screening can work with us as a driver partner,” Mr Eisen adds.

The drivers have fixed charges regardless of the time of the day or weather under which they are working. For instance, the drivers charge Sh350 to Kilimani from the CBD and Sh700 for customers heading to Nairobi West from the city centre.


The company is also offering other services to augment its earnings. “We have also integrated emergency response services from a leading private security company to provide an extra level of security,” Mr Eisen adds.

These achievements, however, have not been achieved through a smooth ride.

“Our biggest challenges so far have been around creating awareness that such a service exists and persuading drivers to try it out since many taxi drivers are fiercely independent, accustomed to working informally, and setting their own charges,” Mr Eisen says.

He is, however, quick to note that it has now reached a point where drivers are actively seeking to join the network.

Maramoja is now competing against two other taxi apps Uber and EasyTaxi, for customers in Nairobi. It plans to roll out to other parts of the country later this year.

“As soon as we’ve stabilised our growth here in Nairobi, we’ll be looking to expand to other Kenyan cities as well as other African capitals. Nakuru is looking particularly intriguing with their city-wide WiFi,” Mr Eisen says.


Thursday, April 30, 2015

How to create avenues for passive income

A businessman traveller relaxes in airport lounge. There no greater feeling than that of living in abundance. Where the work of our hands has turned in such great result that we are not afraid of even an economic slowdown. PHOTO | FILE

A businessman traveller relaxes in airport lounge. There no greater feeling than that of living in abundance. Where the work of our hands has turned in such great result that we are not afraid of even an economic slowdown. PHOTO | FILE 

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We all have different appetites for success. Different people define success differently.

What is your definition of success? Owning a fleet of top German machines or SUVs?

Having your workforce running into hundreds or even thousands? Fat bank balances that make everyone in your banking hall say hello and give you special service?

Taking holidays whenever and to wherever you like? Living in a top rated suburb? Taking your children to the most expensive schools?

Waking up at noon because you know your assets are working for you and money is being made whether you are asleep or awake?

To be honest, different people perceive success differently and that is okay.

Whatever your vision of a rich life is, we need to bring it to the basics of how the business or businesses you are in make money.


There no greater feeling than that of living in abundance. Where the work of our hands has turned in such great result that we are not afraid of even an economic slowdown.

But what kind of business would you be in to have this opportunity?

There is no doubt that passive income is what we are looking at here. Income that flows in, not because of your day-to-day direct effort, but a permanent inflow effect from the work you have been doing.

Think for example of those real estate moguls, who don’t have to report to work everyday while their tenants, whether residential or commercial, have to break their backs everyday so that they can pay rent. Isn’t that a good thing to have?

I know some of them may have loans but there is a huge chunk of established landlords that are enjoying the good fruits of their labour.

I know of a restaurant in town that is famed to be the tea joint for Nairobi landlords. They meet there, enjoy tea, a good laugh and review newspapers.

I think it is good to always do business and in the process, generate a system that can keep bringing you income.

Getting passive income requires a great effort in terms of time and money. Good incomes are not made from get-rich-quick schemes but a well calculated effort.

For example, I have seen that many people, who run hardwares always begin a side project for rentals.

This is a smart move. These businesspeople know where to source materials and use that as a cost advantage while putting up construction themselves.

Depending on your area of business, try and think of what products or ways you can offer customers without the need to work every hour. Try and think through income streams that will make your business less dependent on one income line.

Here is how to do this. Think of ways to add value to what you are providing. This will help you create different kinds of products and services. If you run an auto yard, for example, there are many ways you can make complementary lines of income.


If I buy a vehicle from you, offer me the option to buy what you have right there or import services to get a car that I can identify online. Every car requires an insurance, act as my insurance agent.

I may also need to add a few accessories, be on standby with those that are must have such as car identity and an entertainment system.

When you have multiple streams of income, be keen to identity those that can keep the income flowing without your direct participation.

Look out for those income strategies, which can make your recurrent revenue stream growing.

From affiliate programmes that are related to your line of business, you are into value addition for your line of products.

Along the way, the hope is that you return the volumes of income that will bring you the true meaning of success.

Business success is not all about money. Many people view success from a monetary perspective.

In my opinion the true meaning of success is the positive impact of your business to you, those you love, those you service and the society at large.


Thursday, April 30, 2015

Habits that could hurt your success

In addition to data, use informed intuition, insights and wise judgment. Be willing to let solutions evolve as you learn more. When you move swiftly, you can adjust your strategy as new information emerges. PHOTO | FILE

In addition to data, use informed intuition, insights and wise judgment. Be willing to let solutions evolve as you learn more. When you move swiftly, you can adjust your strategy as new information emerges. PHOTO | FILE 

As an entrepreneur, you work in a high-stakes environment, you receive all the glory when your company flies high and all the blame when it hits a patch of turbulence.

This pressure to perform can lead you to develop habits that end up hurting your chances for success.

And the habits most likely to cause problems often are the very ones often associated with strong leadership.

Here, three of these deceiving habits and how you can nix them for good. 

1. You know everything

When you need to make decisions in uncertain times, the pressure to have all the answers might lead you to rely too much on history and not realise that you need a new game plan. You think you already know everything.

This tendency toward self-reliance undermines your team. When you know everything, there’s no reason to engage others in conversation. Your team members become bystanders, and that makes it harder for them to share essential information and input, much less rally around your goals.

With a know-it-all approach, you also lack the humility to change course when you’re off track.

When Ron Johnson left Apple and became CEO of JCPenney, he went in with a bold and dramatic change in strategy, exactly what the company needed.

However, his strategy was largely based on what had worked in another industry with a very different customer profile.

The changes didn’t resonate with JCPenney customers, and Johnson left after less than 17 months as CEO. Today, JCPenney is rebounding. Had Johnson listened to more input, he might have been successful in his turnaround attempt.

2. You overvalue data in decision-making

You can track and measure nearly everything today, so it’s tempting to want to collect every data point and to address every uncertainty before you act. But too much data can be paralysing.

And waiting until you have the perfect answer might mean missing the chance to stay ahead of a changing market.

A classic example is Blockbuster, which waited too long to address the threat of streaming video. By the time the company decided to act, it was too late. Blockbuster went from being an industry leader to a has-been, and it couldn’t recover.

Data should act as a guide, not your only input. In addition to data, use informed intuition, insights and wise judgment. Be willing to let solutions evolve as you learn more.

When you move swiftly, you can adjust your strategy as new information emerges. 

3. You focus on ‘wowing’ more than collaboration

The most compelling presentations capitalise on the power of human interaction and involve the audience.

Scrap the idea of a “perfect” presentation, and don’t try to perform an act. Instead, speak with your audience and promote discussion. By doing this, you’ll reap the benefits of collaboration and allow others to see how they can contribute to meaningful change.

When starting out, you might feel the urge to know all the answers, rely too heavily on data to make decisions and communicate your vision flawlessly. But these habits can lead to costly setbacks.

The best entrepreneurs approach every situation with a learning mindset.

Be an incrementalist and listen. Forget the search for the perfect answer, and be comfortable with collaboration.


Wednesday, April 8, 2015

The scam that is online forex trading in Kenya

Investors storm VIP Portal's forex bureau offices in Limuru Town, Kiambu.

Investors storm VIP Portal's forex bureau offices in Limuru Town, Kiambu. VIP Portal promised a five per cent commission per month for every new member an investor brought in. As investors in Limuru shovelled their hard-earned savings into VIP Portal, so did their counterparts in Nyeri, Kisumu, Kisii, Nakuru and Nairobi. PHOTO | ERIC WAINA 

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Mr Robert Siahi had big dreams last year. He wanted to pursue a degree course in a local university.

Already an established trader in Limuru, Mr Siahi thought of financing his dream. During a meeting with one of his friends, he was encouraged to put his money in VIP Portal, a forex brokerage firm based in Limuru, Kiambu County.

“A few days later, I saw Mr Alfred Wangai discussing how profitable forex was on a local TV,” Mr Siahi says. “The figures whetted my appetite and I decided to invest.” Mr Alfred Wangai is one of the proprietors of VIP Portal.

On April 16, 2014, Mr Siahi invested Sh106,000 and on May 22, 2014, he put in an additional Sh500,000. “My contract with Mr Wangai was supposed to bring me Sh1.2 million after 75 working days. It was to be disbursed within three phases but this never happened.” The loss was devastating. It ended Mr Siahi's dream of joining university.

Mr Siahi is among 13,000 investors, who have lost over Sh1.1 billion to VIP Portal in what could turn out to be the biggest forex scam in Kenya’s history.


According to investigations carried out by Money, unsuspecting investors were subdivided into groups, with the Nairobi team claimed to have lost about Sh300 million.

According to police investigations carried out last year, VIP Portal received over Sh1.08 billion between October 2013 and September 2014.

The deposits were from unsuspecting investors in Limuru, Nairobi, Nakuru, Nyeri, Kisii and Kisumu.

According to Mr Siahi, Mr Wangai first opened his offices in Limuru on or around June 2013. “After opening his offices at K-Unity Building (also known as Ushirika House), Mr Wangai tapped the locals to market his firm,” Mr Siahi says.

“It was easy for us to believe in the people we were accustomed to.”

By October 2013, VIP Portal had spread across Limuru. In some cases, Mr Wangai asked investors to sell their land and deposit the money with VIP Portal with a promise that he would more than double it in less than a month, Mr Siahi said.

VIP Portal promised a five per cent commission per month for every new member an investor brought in. As investors in Limuru shovelled their hard-earned savings into VIP Portal, so did their counterparts in Nyeri, Kisumu, Kisii, Nakuru and Nairobi.

The minimum the investors were required to part with was Sh25,000. Meanwhile, Mr Wangai turned to television talk shows to market his firm. His right-hand man, Mr Felix Oluoch, was his chief online publicist.

In messages to investors, Mr Oluoch, who describes himself as “a technical forex trader, a technical qualitative analyst and a strategist, a hedge fund trader and an international entrepreneur”, said Mr Wangai was paying 60 to 80 per cent dividends in four months.

He claimed that VIP Portal had a global office at a little known island St Vincent and the Grenadines.

A few weeks before investors began demanding payments, Money has learned, they questioned the existence of an international office.

Contacted, the Financial Services Authority of St Vincent and the Grenadines denied licensing VIP Portal. But in a sworn affidavit on July 17, last year, Mr Wangai maintained that the firm was incorporated under the Companies Act on August 1, 2013 and incorporated as an international business in St Vincent and the Grenadines since August 2013.


On 7 July, last year, a Nairobi court stopped any transaction in VIP Portal’s four accounts — VIP Portal Ltd, VIP Forex Savings and Co-operative Ltd, VIP Institute of Forex at Family Bank, and VIP Portal Ltd at Barclays Bank.

By the time the accounts were frozen, the firm had a balance of Sh174 million since its directors, Mr Wangai, Mr Collins Thumbi Mundia, Mr Daniel Komo, and Ms Nkatha Karimi had withdrawn much of the Sh1.08 billion.

In a letter dated July 30, 2014 from the Law Society of Kenya to the Inspector-General of police and copied to the CID director and the Central Bank, VIP Portal received deposits from Ms Bernise Kirungi, Mr Francis Thuo and Mr James Mbuthia amounting to Sh3,061,585 between April 29, 2014 and June 10, 2014.

In a reply to the law society, the Inspector-General of police noted that VIP Portal had been under the investigation of the DCIO, Limuru, since March 2014.

The DCIO wrote to Central Bank seeking to establish whether VIP Portal was registered by the regulator to trade in forex or carry out any banking business. Central Bank denied licensing it.

Additionally, in a letter signed by officer in charge Joseph Mugwanja, on May 20, 2014, the Banking Fraud Investigations Unit started an inquiry, which established that between October 1, 2013 and May 28, 2014, VIP Portal received Sh1.08 billion from investors.

Of this amount, Sh7.6 million was paid out to Ms Karimi and Mr Mundia, Sh19.3 million was wired to the accounts of FXCM Markets Ltd of US, while Sh528 million was noted to have been paid out to the investors.

In August 2014, VIP Portal opened new ‘accounts’ abroad to facilitate deposits. “We have over 5,000 accounts abroad that need to be catered for and hence the reason why we partnered with UBA Bank,” Mr Oluoch told investors.

Mr Daniel Njuguna Mwangi, UBA Kenya, head of marketing and corporate relations refutes the claims by the forex trading firm.

"VIP Portal approached us with a view to opening an account. However, after conducting our due diligence, the bank declined to open any accounts for both the company and the investors," Mr Mwangi said.

Notably, closing of the three local accounts has since become the reason that VIP Portal uses to counter accusations by its investors.

Take this message by Mathews Mutonga to VIP Portal: “I invested Sh50,000 in April 2014 and I received Sh30,000 once and the dividends stopped coming. I paid Sh400,000 and received Sh320,000 once and the dividends stopped.

Then I paid Sh300,000 and got nothing.” In its response, VIP Portal said, “It is the banks that are holding your money, not VIP Portal.”

As the reality dawned on investors that they were conned, some started begging.

Mr Mutonga, together with another investor, Ms Anne Wangui, wrote to VIP Portal: “I have been told that I would be paid within three days since June 2014. The money invested is what my family is relying on to pay for my children’s school fees.

You told me that my papers were among those taken by Central Bank anti-fraud police but all I know is that you owe us Sh750,000. I hope I will one day get my money back.”


During a meeting at Alders Restaurant in Limuru, the aggrieved investors invited Mr Wangai but he declined to attend, says Mr Siahi.

“The last I saw him was near K-Unity, where he was heavily guarded.”

The investors’ pursuit for justice has also been characterised by delaying tactics.

“The case was to start last year, but we had instances where files disappeared and others where Mr Wangai refused to accept summons or claimed he wasn’t served,” says Mr Siahi.

Even with claims of conning investors over Sh1.08 billion, VIP Portal has since launched a new forex product dubbed PAMMOJA.

“You fund your account via Netteller, then we trade on your behalf and share the profits,” Mr Oluoch told an investor, Mr Boniface Ndichu.

According to Mr Oluoch, PAMMOJA is a deal between investors and VIP Portal, where the firm has full access to an investors’ money, which it uses to trade on their behalf and later share the profits every 29th working day of the month. 

EDITOR'S UPDATE: UBA Kenya response to the claims by VIP Portal.


Wednesday, April 8, 2015

Processor puts smiles on the faces of dairy farmers

Mukurweini Wakulima Dairy general manager Mr Fredrick Muriithi outside the plant at Mukurweini town in Nyeri county on March 30, 2015. With over 70 distributors in Nairobi County, its main market, the firm is giving established rivals a run for their money. PHOTO | JOSEPH KANYI

Mukurweini Wakulima Dairy general manager Mr Fredrick Muriithi outside the plant at Mukurweini town in Nyeri county on March 30, 2015. With over 70 distributors in Nairobi County, its main market, the firm is giving established rivals a run for their money. PHOTO | JOSEPH KANYI 

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It may not be playing in the same league with the big boys of Kenya’s dairy industry such as Brookside, New KCC and Githunguri Dairy at least for now.

But barely nine months after it ventured into the pasteurized milk market, Mukurwe-ini Wakulima Dairy is causing ripples.

With over 70 distributors in Nairobi County, its main market, the firm is giving established rivals a run for their money.

“We want to stamp our footprints in this competitive market by growing our volumes and enabling our farmers to maximise on their efforts while at the same time eradicating poverty,” said general manager, Mr Fredrick Muriithi.

For the group of peasant dairy farmers, who started as a self-help group and could hardly transport their produce to the market, theirs is a story of tenacity, their dream has finally come true — after waiting for 25 years.

Today, Royal fresh milk processor has a fleet of vehicles. The company, which could not dare step into any financial institution as it was dismissed as credit unworthy, has an investment asset base of Sh200 million and is attracting many lenders as its investment portfolio rises steadily.


“Today, we’re able to service a Sh90 million loan from CFC Stanbic Bank that has enabled us to put up a modern plant with a capacity to process 100,000 litres of milk per day but due to the prevailing drought, we are only processing 24,000 litres daily,” said Mr Muriithi.

Apart from the lenders, who want to partner with the processor, Nyeri County government has also stepped in, pumping Sh26 million into the firm.

“With this kind of assistance from Governor Nderitu Gachagua, we have elaborate plans to expand our production and in the next four months, we shall be producing yoghurt, ghee, butter and cheese,” said Mr Muriithi.

The company has also attracted assistance from Agriterra, a non-governmental organisation from the Netherlands, which has trained its staff on extension services, animal husbandry besides good governance.

With a view to help the local farmers, Mukurwe-ini Wakulima Dairy has scored another first by establishing Wakulima Commercial Savings and Credit Society where over 6,000 milk suppliers access cheap loans.

According to the chief executive officer John Mwaura, the Sacco has been rated as one of the best in Nyeri County for the last five years in a row. Last year, the Sacco’s 17,000 shareholders were paid a dividend of Sh6.5 million.

The company has increased its investment portfolio by constructing a four-storey administration block besides a modern laboratory for testing the quality of milk.

“Dairy industry is very sensitive and we have employed qualified personnel, who test the milk at the collection point. The company laboratory makes sure that we maintain the best industry practices as we grow our business,” added Mr Muriithi.

The processor’s plan is to transform Mukurwe-ini sub-county into a metropolitan within Nyeri County and towards this end, it has employed 11 university graduates, 38 diploma holders and a number of certificates holders from the Rift Valley, eastern and western parts of Kenya, making up a total workforce of 133 from the initial four.


But it is the company’s focus on the farmers that has seen it win the hearts of many and today apart from its core suppliers in Mukurwe-ini, the company is attracting dairy farmers from neighbouring Tetu, Mathira and Othaya.

“We pay our farmers Sh33 per kg and apart from the prompt payment, we have opened a food store where the farmers buy wheat flour, maize flour, sugar, tea leaves among others on credit,” said Mr Muriithi.

The company has also put up an animal feeds factory and a veterinary services arm where dairy farmers get Artificial Insemination services for their stock.

“One of the main reason for poor milk production is substandard animal feeds and that is why we put up a plant, where we control quality and this has paid dividends. Our farmers get quality feeds at a subsidised and affordable prices, which translates into increased milk production,” he said.

But what has been the processor’s success secret? “We rally the stakeholders and make sure they are focused and believe in the company’s vision. When every player knows the path of success, turning the company into a profitable cash cow becomes the easiest thing to accomplish,” said Mr Muriithi.


Wednesday, April 8, 2015

Why you need to save until it hurts

I know many people have piggy banks and even children bank accounts. As you teach your the young ones how save, be sure not to conflict yourself with spendthrift habits. PHOTO | FILE

I know many people have piggy banks and even children bank accounts. As you teach your the young ones how save, be sure not to conflict yourself with spendthrift habits. PHOTO | FILE 

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How time flies! The Easter holidays are here. The first quarter of the year is gone.

When I last wrote about developing a savings culture, I received many responses from the readers of this column.

Several people wondered when is the right time to teach for example your children how to save. I know many people have piggy banks and even children bank accounts.

How well does your child understand why they own a piggy bank and for the older ones, a bank account? You need to take these lessons seriously and ensure that the culture is developed when they are young.

They need to own it too. I know of a parent, who deposited Sh50,000 to his children bank accounts as pocket money right after Form Four exams.

The children used the money very differently with one almost wiping out the account in no time.


The other child was very careful and seemed to take care of the money only taking small amounts, which he could explain why. These were two children of the same age.

As you teach your the young ones how save, be sure not to conflict yourself with spendthrift habits.

Be sure also not to conflict each other as parents. Remember, if your children do not learn the value of money, they are likely to demolish your estate in no time the day it will be transferred to them.

How much savings have you put away since the start of the year?

Have you been faithful to your goals? If the main reason you have not kept the promise is less cash, be sure to review your business so far and work on those things that can help you meet your half year or annual savings goals.

Don’t give in to the self excuses that will prop up when you ask yourself this question.

It is a fact that we are a society weak in raising savings. Indeed, this is one of the biggest challenges of growing wealth. Wealth is accumulated over time. As a business owner, you need to work keenly on your saving culture.

Try saving little every day or per week if monthly goals are catching you off guard. Sometimes, the larger sums of money may not be visible at hand, say in your bank account but you will be surprised by the total ins and outs when you examine your monthly bank statement.

How much should you save every month? We all make different income every month, for this reason, we all cannot save the same amount.

Treat your savings like airtime. I do not know how many people today have the discipline of not loading airtime just to have it or incase you need to communicate on your phone. You want to always be prepared to send that text or make that call.

Well, be as prepared for a rainy day by putting away some money every so often. Ensure you keep aside an amount of money every month without fail.


But is the old saying that we should save 10 per cent really what we should be comfortable with?

Depending on your income and wealth goals, it may or may not be enough. A good way to know if you are saving enough is to save until it hurts.

Once you start to feel a bit tight, there is a likelihood that you are saving enough. It is safe to begin with 10 per cent and keep increasing until you feel a pinch. You will be surprised how much money was passing through your hands and was never trapped into your savings scheme.

Remember to always save with a purpose too. Otherwise, you will blow off all your first quarter savings with Easter holidays just because you feel you can afford.

This is what happens when you have no plan. An opportunistic plan will strike and wipe out your hard-earned savings mocking your very self discipline and destroying your pride in learning how to save.

You should be fully aware of your long-term plan for your savings. You will be surprised how fulfilling this is.

Your savings will grow very quickly if you diligently save every day, week or month without fail.

If you are not saving any money currently because your expenses sweep away all your income, look through each expense and establish what costs you can cut.

Always budget for your income too to avoid unplanned expenses. Happy Easter holidays and saving!


Wednesday, April 8, 2015

How to retire wealthy as an entrepreneur