How Eric Muli set up a revolutionary credit model_Lipa Later

Eric Muli, founder, Lipa Later

Eric Muli’s unique experience in both Kenya and abroad led to the incorporation of Odyssey Capital Limited-a company behind Lipa Later. Lipa Later is a facility that provides electronic loans, business loans, and salary loans to individuals and businesses in the low to middle income bracket in the region.

Eric is a graduate of Babson College in the US. He holds a BSc in Finance, Economics and Political Science. He says Babson College, which heavily focuses on nurturing the spirit of entrepreneurship, did a great job in shaping his career by placing him in the right environment and horn his business skills while still learning.

“In 2011 while still in the university, I co-founded a marketing agency with a couple of friends. Dubbed Jossle, the company packaged marketing strategies for companies such as Microsoft and Uber and marketing campaigns for other big brands across campuses. By the time I left, we had crossed a million dollar in sales. It was an eye opener for me. I graduated in 2014 and came back home.”

Coming back to Kenya, Eric started conceptualizing the idea of Odyssey Capital in 2015. “At the onset we envisioned a credit-lending facility whose idea was similar to traditional lenders. We offered normal loans like other players,” he says.

However, before they could go far with this model, they realized there was a gap in the market which forced them to wipe the slate clean. “We were financing individuals but they were not using the loan facility for the required purposes,” he recalls, adding that, “we also learned that millions of young Kenyans could not afford essential commodities like smart phones, laptops, home theatres and kitchen appliances. Other mainstream financiers had shunned these demographic as they were considered a big risk.”

“So we invented a model whereby we would enable individuals to acquire the said items and pay directly to the places they make purchases through Lipa Later facility,” he says.

How then does Lipa Later works?

“A client can download Lipa Later App, log into or dial *483*38# and apply for a product he wants. He will then follow prompts and fill a response form, after which he will be notified whether he qualifies for the item or not. If he does, then he will be required to pay a stipulated deposit and take the product home. He then pays the remaining amount in monthly installments, which are determined by his income,” explains the executive.

This credit model has made life affordable for many Kenyans and its impact on the standards of living has been boundless. “We understand that part of the key elements that define standard of living in developing markets is the price of common commodities. Once we finance individuals to acquire these commodities we have answered a pressing need and helped in uplifting their standards of living.”

He gives an example. “Anyone earning a monthly salary of Kshs 20,000 will struggle to acquire a decent smart phone. Why? There are many competing needs such as food, rent and transport. Our model helps such individuals live a decent lifestyle through timely acquisition of the products they need.”

The firm has also adopted a robust risk mechanism to asses a client’s creditworthiness. “We make use of phone data, mobile money usage and how much income one makes in a month as well as the estimated expense among many other data points. These are then built into different algorithms that are used to determine an individual creditworthiness.”

Lipa Later works with a range of retailers and electronic brands including Apple, Sony, Huawei, Oppo and Techno to make the acquisition of electronic items manageable, drive sales and bridge financial exclusion. It is against this backdrop that the firm inked deal with a leading retailer as Eric explains. “We recently partnered with Wallmart (runs game store) to enable purchase of commodities across all their stores in East Africa. We have also introduced a VISA enabled credit card to help people and make purchases without a hassle.”

To further drive its uptake and build strong customer base, Lipa Later works with a vast network of sales agents across multiple touch points countrywide. Their incredible growth in just two years has further been credited to its robust permanent team of over 50 individuals.

Having established a presence in Kenya, the firm has sets its eyes on Rwanda and other East African countries before spreading out across Africa.

In his own words

  • Entrepreneurship is tough and not for the faint hearted. You have to be persistent, aggressive and innovative to succeed.
  • Any challenge you face along the way is a sign of growth. I try to anticipate them before I’m caught flat footed.
  • I read a book every month. My favourite read is ShoeDog by Phil Knight -A memoir by the creator of Nike.
  • I set up Alpha Force Security while still in college. The firm, which is still operational, employs over 100 security guards.