Samchi Credit: Lending that impacts entrepreneurs

Esther Muchemi, CEO and Founder, Samchi Credit

The company’s key aim is to empower entrepreneurs by giving them access to credit

Esther Muchemi, a seasoned entrepreneur, believes that success can be replicated. “If you run one thing that’s successful, it allows you to run more things that are a success. Entrepreneurship is all about principles that work.”

While most entrepreneurs tend to settle after realizing success in their respective ventures, Ms Muchemi, the founder of Samchi Telkom never settles. Instead, she focuses her energy on building more successful companies, her way of replicating success.

“When I was growing Samchi Telkom, there came a time when I was asking myself, what are the sectors that I want to play in?

I always wanted to make a difference in people’s lives, so I chose telecommunications, finance, hospitality, real estate and manufacturing.

Known for founding Samchi Telcom, one of Kenya’s largest Safaricom dealerships, among other successful business outfits, Ms. Muchemi’s brush with the credit industry happened many years ago, stirring her desire to play in this competitive field.

As an accountant, she says she once did shylock business; lending money to customers at exorbitant interest rates. She says that although the business made loads of money, it kept disturbing her conscience.

“I felt like I was taking advantage of people’s misery and closed the business. ”

She says she reasoned that there was a way lending could be done in an ethical and professional way.

Her solution was aptly named Samchi Credit, a venture she started 10 years ago.

Through her experience as an unregulated lender, she says she realized there was a huge gap in the financial industry as most people at the bottom of the economic pyramid were excluded from mainstream financial institutions. Seeing an opportunity, she registered Samchi Credit and set out to give credit services to Kenyans, especially those at the lowest point, economically.

Her new company failed to quickly morph into a roaring success as she had envisaged. Instead, it ran into serious headwinds.

“When I started Samchi Credit, we had no physical office. I teamed up with a friend to run it in his premises, an arrangement that worked, although not for long.”

After a few years of operating, the company ground to a halt. The two partners couldn’t agree on some issues, choosing to end matters amicably. Predictably, this was one of her many setbacks that almost forced her to wind up the business. But she didn’t. Through support from her staff, she chose to persevere, building the business from the ground up.

“Although we had challenges, I knew the business was practical. With the right people, structures and the right interest rates, this could turn into a booming business,” she says.

As with her other businesses, her philosophy is to start small before scaling, and that’s what she did when she reinvested into Samchi Credit five years ago.

Her drive to reinvigorate the business was fuelled by the fact that her son was graduating from the university and could carry on with the lending business.

“I talked to him, and he agreed to join in with a friend. That essentially marked the start of Samchi Credit’s revitalized journey.”

For Ms. Muchemi, executing this business in an ethical way was an important aspect that she couldn’t overlook. She says with the right structures and rates, her business was ethical and could no longer ‘disturb her conscience’.

Since then, the business has grown tremendously over the years, serving thousands of small, micro and medium entrepreneurs and turning around their lives.

So, what makes Samchi Credit tick?

“Our main aim is to positively impact the lives of our customers.”

Samchi Credit is popular with customers because it deploys a unique model of lending, where advisors work closely with customers to understand their entrepreneurship journeys.

“We create a relationship with our customers. We know these are people that had been locked out of mainstream finance, the reason we rarely ask for collateral. We usually look at the customers ability to repay loans.”

At inception, Samchi Credit was primarily doing logbook loans and personal lending. Although the two products are still there, the company now focuses on group lending to impact the lives of many more customers.

“For me, satisfaction is working with people at the bottom of the economic pyramid and bringing them up to a certain level. It’s not all about making money, but making a difference in people’s lives.”

Samchi Credit stands out from most lending companies because it offers advisory services to its customers to inculcate financial dicsipline in them. Ms. Muchemi says that her company gives its customers the solutions they need. “At times, we realize that the problems that our customers face are not just about money. Sometimes they need to change a few things in terms of the way they do business and we are always at hand to advise them,” she says.

Because of this, her company doesn’t have many defaulters. She says she believes in empowering women and the youth to become the best they can be as they are the future of this country.

“Empowering women can impact the GDP. You empower a woman, you empower a whole community.”

Even as the credit industry in Kenya continues to grow, Ms. Muchemi says the industry needs to get liberalized to change how Kenyans access credit. As it stands, most financial institutions demand for collateral from the youth and women before they extend any loans to them. She says the two segments are disadvantaged because they come from a background where they don’t get any inheritance.

“There’s need to review the way lending is done in this country. Financial institutions have the ability to change the lives of many people, only if they were more sensitive to the needs of customers,” she says.

According to her, the youth and women need to be empowered financially for them to create jobs.

“The main problem is not lack of education or finances, but lack of jobs. How do we empower people to create jobs?”

Looking at the impact that her lending business has made over the years, its easy to see the connection between access to credit and job creation.

She believes that most Kenyans are entrepreneurs and are only limited by lack of collateral. This explains why so many people say they struggle to get financing for their businesses.

“I’m coming from a point where I believe that if you want to create wealth, you can’t do it without borrowing. Knowing what I know today, I would have started borrowing as soon as I had an income.” She adds that borrowing accelerates people’s ability to create wealth, if they do it the right way. “I won’t recommend over borrowing. Also, you should only borrow to put money in a project that generates an income. This is why Samchi Credit needs to know your reason for borrowing.”

For Samchi Credit, the demand for credit keeps on rising and Ms Muchemi is aware that her company can be scaled to meet this demand. She’s working on a plan to fully scale her business to reach more customers.

Entrepreneurs keep on innovating to remain competitive in an ever evolving business environment. Ms. Muchemi is not an exception. She’s known for reinventing herself to create practical solutions. That’s why she is creating a unique solution pegged on Samchi Credit, that will allow people at the bottom of the pyramid to own land.

Samchi Telcom gave some land to Samchi Credit. The company is creating a solution that will see customers lease out the land by depositing Sh500 every day for three years, after which they get to own the land. The solution targets customers who make a daily income, including market traders and Matatu crew.

Advice to entrepreneurs

  • Having made significant progress in the world of business, Ms Muchemi has some nuggets of wisdom for the quintessential entrepreneur.
  • “You need to have passion, drive and creativity to make progress in business. For me, I believe in myself and I also have faith in God. I also enjoy support from my kids and all these positives keep me strong.”
  • In the end, she says she doesn’t really know if entrepreneurs are made or born, although she believes it’s a combination of both.
  • Going forward, Samchi Credit wants to continue impacting the lives of thousands of entrepreneurs, helping them to create jobs for themselves and for others.




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