John Chomba quit his job at a government’s department in 1985 where he had been working for five years to venture into the business of selling motor vehicle spare parts and tires.
Mr Chomba’s dream was always to start a business and be an employer rather than an employee. He started entertaining the spare parts business idea two years into employment.
With Sh30,000 he had saved from his salary, he translated his dream into a reality. He, however, had to contend with the fact that he had little knowledge about the venture in addition to the financial constraints.
“We had problems with financial institutions which were reluctant to finance a new business. To get a loan, one was required to have collateral which was either land or some other property. I did not have any,” says the proprietor of Fontana Enterprises.
Mr Chomba, a mechanical engineer and a graduate of Nairobi’s Kenya Polytechnic (now Kenya Polytechnic University), was however confident he would learn along the way about the business and ultimately master the game. However, learning the ropes was by no means easy. Three months down the road, the challenges came in droves, pushing him to the edge.
“Three months after starting, I almost closed down the business. I was not making any profit yet I had to pay my three members of staff. This made me to go back to the drawing board to conduct more research about the business,” says Mr Chomba.
“It was not an easy ride but through resilience and determination I learnt more about the business as the time went by.”
Luckily, after doing the research and setting off again in the business journey, things began to look up. Going back to the drawing board he says “was the ultimate turning point of my business as five months later I made my first profit.”
“I remember very well the first time I made a profit of Sh15,000 five months into the business. At least for once, I did not struggle to look for salaries from other sources as I had done few months before,” he says.
The entrepreneur now advises that market research is indispensable for anyone who wants to start any successful business.
“Conducting research is crucial. Starting a business requires that you obtain critical information about the business. It helps a lot,” says Mr Chomba, adding that the environment for starting a business has changed tremendously and budding entrepreneurs have a number of options for funding.
“With an LPO (Local Purchase Order) today, one can access loans from banks. Rules for acquiring loans have been relaxed as well. You can also find relevant information online, something that we never experienced back then,” he says.
Looking back, Mr Chomba says, he has ridden the storm of challenges and come on top. He now has 15 employees and about 20 reliable customers whom he supplies with spares and tires. His spends about Sh350,000 on salaries, in addition to what he pays temporary staff.
Having realising how difficult it can get for those starting out, the entrepreneur now uses his long experience to help young people to get their footing in the world of business.
Under the initiative known as Entrepreneurship Training Programme which he started in 2010, about 700 youths from 17 sub counties in Nairobi have received free business-related courses. Trainees are taught how to apply for loans, prepare business documents and book keeping.
Mr Chomba says that although the government has set aside 30 percent of public tenders for young people, the disabled and women, they lack the requisite information and skills to successfully apply for them and generally navigate the ups and downs of the business world.
“The government has allocated 30 percent to youths, women and people with disabilities. However, rarely do the young people access the tenders simply because they have no information. We need to empower youths to take up opportunities that belong to them,” says Mr Chomba.
Echoing sentiments made by venerated former US president John F. Kennedy, Mr Chomba says successful entrepreneurs, or indeed any other citizen, should ask themselves what they have done for the country instead of always waiting on the government to do everything.
The entrepreneur desires to expand his programme to benefit more youth but says he lacks the resources to do so.
“Many youths should be incorporated because we have seen success stories out of this but I have limited resources to expand the initiative,” he says.
“I wish both government and private partners would come on board to help us empower more youths to become employees who will spur our tomorrow’s economy.”
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.