Marketing Mix Seminars

Here are a few pictures from recent travel visiting Gitithia branch offices. Lydia's brother, Stephen, is visiting for several weeks and has helped design a marketing seminar that we would like to take to Gitithia's branches. There are eight of them so we'll see if we can make it to all of them. Sure hope so!

Taking the Next Step

(This is a story I wrote for a Partners Worldwide publication)

Why are entrepreneurs willing to take on the risks of starting their own venture? In most instances, that person has a new idea or product that drives them to strike out on their own. In countries like Kenya where the unemployment rate is over 40%, many people start small businesses out of necessity. For some, the lack of education and direction can limit their success. Others stop growing because banks see them as too small and too risky for loans. Without outside help, how can they expand? How do they take the next step? Stephen Ngai has only been a member of the Christian Entrepreneurs Saving and Credit Society (CHESS) for two months, but he knows that the support and affordable credit CHESS offers will help him take the next step. After teaching for 33 years, Stephen opened Banana Hill Technical Institute in his rural town. While not yet proficient on computers, Stephen knows that his fellow villagers need to learn computer skills to succeed in the 21st Century, even in rural Kenya. He hired an instructor to begin classes teaching computer basics – Microsoft Word, Excel, PowerPoint and Internet Explorer. His vision is to go further and hire an instructor able to teach advanced programs. He is currently able to offer a one month certificate course and with this additional instructor he can offer a six month course culminating with a diploma. With CHESS' help, Elizabeth Thuo and her husband took the next step. They started a cooking gas distribution business in 1999. They quickly became members of CHESS as business was good and they had money to save for future growth. Realizing that saving enough cash to open a second cooking gas distribution shop would take too long, they utilized the multiplying power of CHESS' loans. Their loan allowed them to open a second location, fill it with an adequate supply of gas canisters and hire another employee. Sara Maina has been in business for two years and already she wants to take the next step with a loan from CHESS. Her seamstress school and clothing retail shop has been doing well, but classes are getting crowded and the retail shop no longer holds all the clothes she would like to display. She is interested in renting space next door for the workshop and school and also opening another location in a nearby town. With counsel from CHESS' field officer and a loan, this expansion is possible. Isaiah and Jane Kahuki were some of the first members of CHESS and together they have taken many steps together. They have gone all the way from a one room school house to a well-respected academy. Isaiah and Jane love children and are good at business. So what better combination of their two passions than opening a school? With humble beginnings in a small, wooden shanty, the Waka Academy has grown tremendously. The shanty is still on the school property as a symbol of where God has brought them from. Remarkably, Waka Academy's school bus is itself larger than the original school house. In these and many other cases, the way Kenyan business owners take the next step is with loans, business training, networking forums and marketing services provided by CHESS. The idea of helping others take the next step was modeled to CHESS by its partnership with a group of North Americans. This relationship has helped CHESS grow into the organization it is today. Through their sacrifice of time and willingness to share their experiences, CHESS is able to walk with these businesspeople each and every step of the way.

Watoto kupenda kuku...

...or in English "children love chickens." Hopefully, they love raising them and not just eating them.

On Saturday, 30 orphans were given the responsibility of each raising three chickens. This all started with a wonderful gift from our pastor's family back in Washington, D.C. They have a great practice of giving their children money to regift to a worthy cause. A group of orphans in the village of Gitithia were the blessed recipients of their family's generosity.

The orphans are being supported by a Partners Worldwide savings and lending group to able to stay in the home of a grandparent, auntie or family friend - often a great alternative to growing up in an institution. The plan is for the chickens to provide a little help with the family diet, but also we are opening a savings account in the name of each orphan where they can bank the proceeds from egg sales. The money will be there for them to use for future micro-enterprise ideas and the financial lessons learned will hopefully help them prepare for a future of supporting themselves.

Here are some pics of the fun...

Theater church in the slums

Our home church back in Washington, DC had a great model of doing church in the marketplace. They wanted to be approachable to the churched, unchurched, and dechurched. This is one of the reasons they meet in movie theaters across the metro area.

A while back, one of my Kenyan friends shared his dream of opening the Kenyan slum version of a movie theater, a 'video show' - a shack with a TV and a DVD player. Ever since, we have talked and prayed about how this business idea could also be used for ministry. This type of church venue could be especially effective in reaching the late teens and twenty somethings, many of whom see the church as the boring thing their grandma and mom go to for four hours on Sunday. Meeting in a movie theater is a culturally relevant way to share the gospel.

Now we are considering how to go about it all. How do you partner the for profit business with the Kingdom mission of it as a church? Most of all we need God to provide someone who knows this generation and knows Jesus and wants to introduce the two.

4/28 Update:

Today, I met with my two friends living in Kawangware and their pastor. We discussed the possibility of the twenty somethings starting a ministry/church using a movie theater as their meeting place. They loved the concept and thought that it could be very effective in Nairobi's slums. They are going to go draft up what they envision the business and ministry could look like. Glad to see them taking the initiative. For this to work, it must be their ideas and motivations pushing the concept, not mine. The NCC team coming in May could be very helpful in getting those planting the church to think critically about who they are trying to reach and how best to do it. They are a creative and experimental lot. Heck it is one of the church's core values.

Here is a picture of a video show (movie theater) in a rural area of Kenya. It is similar to ones found in Nairobi...

My day fighting corruption and incarceration

Lydia and I found ourselves emotionally drained this evening. Our day consisted of mob justice, holding cells, and corrupt officers.

Today's craziness has its roots in my commute two Friday's ago. I was headed to work and came to a particularly challenging intersection where cars have to fight their way through the cross-traffic. As I inched my way forward, looking back and forth at the oncoming traffic, I was startled by a police officer tapping on my window. Conversations with police officers are very common in Kenya. I am pulled over at checkpoints two to three times in an average week. But this had me a little worried because he pulled me out of traffic so he must have noticed an offense he could trouble me with. Apparently one of my brake lights wasn't working. He asked me to give him my license and pull to the side of the road.

Unfortunately, the back and forth that ensued is all too common. It had little to do with the offense and how it may endanger the public. It had everything to do with whether or not I had money to “make this problem go away.” I told him that I was grateful that he pointed out the faulty light and that it would be impossible for me to know its failure without someone like him showing me. He tried to intimidate me with warnings of impounding the car and putting me in jail until court on Monday. I told him I am happy to take care of this, but that I will be traveling an unable to make it to court. This got him all excited..."oh so you have money to travel, well you have enough money to get this problem to go away." I told him, "No, I have enough money to get the brake light fixed and I don't have money to give you." In the past, I have often been let go after standing firm against bribe requests, but today they were “cracking down on offenses like this.” I so badly wanted to ask why they weren’t cracking down on the rape, murders and corruption so prevalent in this city.

My unwillingness to pay the bribe got me taken to the police station where I experienced more threats of jail and impounding the car. After the third officer made the same “threats” I realized they were serious. Come to find out even minor offenses require you to post bail or wait till the court can take up your case. It is becoming clearer why corruption is such a problem – if you want to go the legitimate route it is going to cost you much, much more and take significantly longer. Why apply for your product to be certified by the Bureau of Standards and wait the six months to one year when you can pay a little something on the side? Why take a ticket and go through all the trouble and pay 2,000 shillings to the government when you can pay 200 shillings to the officer on the spot?

After agreeing on a 2,000 shilling bail I was let go. My court date was scheduled for this morning…in the Kibera slum. I was pulled over on the other side of town and I know the officer thought he would “stick it to me” by sending me to the court in the slum. It would have been intimidating if I hadn’t spent a lot of time there because of Lydia’s work and if several of my friends didn’t live there.

A wonderful Easter holiday on the coast had me thinking of anything but facing the Kenyan court system, but after our morning language lesson I went to face the music. Lydia went along because we anticipated it being a quick pay the fine and leave type of deal. Right along the main road near our home we hit traffic in an usual spot. A huge crowd was gathered off to the right. Then I saw it. A bat or stick swinging up into the air and back down. Over and over. Later, we found out a man had been robbed of a couple thousand dollars. The thief had been caught and he had been killed by a mob… that then ran off with the stolen money.

When we arrived at the court I remembered the police officer’s warning “If you don’t show up on Tuesday, a warrant will be issued for your arrest.” This got me moving quickly to find where I was supposed to be. After asking around, I found the right courtroom. I joined a crowd trying to push its way within hearing distance of the judge. Lydia waited outside and answered a fateful phone call. Being in the middle of a bunch of people I didn’t notice Lydia talking on the phone rescheduling a meeting. I sure noticed when two officers pushed through crowd out of the court and grabbed my wife by the arm and started dragging her through the courtroom and through a back door where all the scary looking defendants were coming from.

We both had no idea what was going on. Why were they taking her? What was going to happen to her? I didn’t notice myself yelling “kwa nini!” (why) in the middle of the courtroom. The officers tried pushing me back. I think they noticed pretty quickly that they were either getting both of us or neither of us. Lydia was taken back to the quintessential foreign prison/holding cell you see in the movies. Remember we are in a slum so the characters in there seemed pretty threatening. That’s when we both let them have it. We dug in our heels and said “No! We aren’t going in there. We are here because of a faulty brake light and this is ridiculous.” So instead we got to stand among all the criminals in handcuffs waiting in line to be called into see the magistrate.

And so began five and a half hours of not knowing what was going on and what was going to happen. Come to find out a little “Quiet” sign in one area of the giant court lobby meant that no cell phones were allowed and that using one was grounds for arresting someone. Which they tried to do to Lydia. After a call to the embassy that was comforting but not too helpful, we began asking every prison guard and police officer what was happening. Nobody was any help. The only help or reassurance we got was from those awaiting trial. Funny that we were bullied more by the justice system than by the offenders of it.

Slowly we began moving through the system. After a couple hours in the dark, smelly and crowded holding area, we were allowed to sit in the courtroom to wait to see the magistrate. His morning tea ran into lunch time. So after two hours of us sitting on a hard word bench he returned. My name was called. I was asked whether my brake light was faulty. I said yes. Paid a $25 fine. Waited an hour for a receipt. And then we were free.

We were grateful that Lydia was let go without charge for her supposed offense. Somehow though we felt offended and couldn’t shake the foul feelings of the place. It didn’t help when we saw a dead body on the side of the road on the way home. It was far from where the mob had been so I imagine it was from a separate incident.

I have lots of thoughts about justice hanging around. Like why would such a minor offense be taken so seriously while such suffering is taking place? What can be done in the justice system so that people don’t feel like they have to take matters into their own hands? As powerless as we felt in “prison” how must these others feel who have no advocate, no voice? We saw our day in court, but the thief’s case was decided by boiling blood. Will the other man’s death be investigated? His body wasn’t even picked up.

Please pray for the families of the thief and man on the side of the road. Also, I am praising God for getting us out of there safely.

You call it ice cream, I call it a popsicle. Let's call the thing JuICE

Well today was the first day our micro-enterprise hit the streets. We don't have a name yet but the partnership is between myself and Alex Ambani. It all started with Alex pulling me out of the path of a wayward truck.  In return, I've helped him look for work - he's trying to put his sisters living in western Kenya through secondary school. Having no luck, I offered to help him start a business that we could do together until he could "buy me out" - which we've found works better than just gifting the money or giving a loan outside a membership in savings group.

With that background...Alex and his cousin went out this morning to test the market with 15 popsicles we made from juice. They returned with all sold. The only problem is they were forced to sell them barely above cost due to a competing product selling for one third our intended selling price. Our product was superior, but with cost conscious customers they preferred price over quality. This evening, we regrouped and decided to reduce the size of our popsicles to the competition's size but keep the orange flavor strong and sweet.  This way each unit is significantly less which will increase our margins at this lower selling price.  We hope to get the right product at the right price and then begin engaging others to sell the iced juice.  I'll keep you updated but feel free to give suggestions in the comments.  

Marketing Seminars

This is another post appealing to my extremely intelligent and experienced friends and family members nice enough to check in on this blog.  Our largest business group, Gitithia Rural Agrofinance Group, has organized branch meetings once every other month for its 2,500 members.  Members are organized into smaller groups called cell groups that meet monthly for fellowship, peer mentoring, and guarantying each other's loans.  

These bimonthly branch meetings are used to keep members updated on the business group and are an opportunity to train small business owners.  The high unemployment in Kenya has a huge effect on the makeup of businesspeople.  Because there are no jobs, many people have no choice other than entrepreneurship.  They would otherwise be content to work for someone else because they lack the education, an entrepreneurial spirit, and the finances to start and run successful businesses.  This isn't always the case though.

All this to say, we are going to be putting on marketing seminars following the branch meetings next month.  If you have any ideas about what we should include, please leave your ideas in the comments section.

Social networking for micro-enterprises

If information is power, that means entrepreneurs here in Kenya are somewhat powerless.  They often can't use the Internet to do research, can't advertise beyond having a sign in front of their shop, and usually source inputs from their immediate area.  

Similarly, consumers are powerless without knowledge of their options in buying food, housing materials, schooling options, etc.  Without resources like 411, yellow pages, and newspaper ads there aren't many ways to gather information in order to make educated decisions about purchases.

How can these rural and slum businesspeople connect with customers and with each other?  This is the question I've been asking myself lately and have decided to come to you to gather your input also.

I've been getting kicked around by my colleagues for kicking around idea after idea that involves SMS or text messaging.  But this is the way everyone Kenya communicates and I think it can be harnessed in a way that benefits businesses.

First idea, our business groups (membership from 300-2,500) can offer an SMS advertising product to their members.  In its simplest form, a business could pay to have all the members of the group sent a message with their advertisement, help wanted ad, or special offer briefly spelled out.  Receiving text messages in Kenya is free so the only cost would be to the business being advertised.  At  2-4 cents per SMS (varies by service provider) that means reaching 300 fellow Christian business owners and their families would cost around $6-$12.

Second idea, because that may be a little expensive for members and possibly to0 broad an audience for an ad, there is a way to allow the SMS recipients to choose which messages they receive.  I've tested out some free software that manages mass SMS lists on a PC.   There is a feature that sends auto-replies when preset keywords are sent back to the original phone number.  One potential use would be to have businesses share one outgoing message with several brief headlines of their ads.  If a recipient is interested in receiving the ad, promo, special offer then he/she replies with the given keyword.  This triggers the auto-reply giving them the predetermined message.  This way the business being advertised is only charged for triggered auto-replies.  This reduces their costs, narrows their message to only interested parties and gives them a follow up phone number for future ads.

Third idea, take that model and turn it into a business.  Example, collect or buy a list of 100 hardware store owners north of Nairobi, then sell this service to paint suppliers, tool manufacturers, etc.  Keywords could also be used like Google does in their ads.  If a hardware store owner sends an SMS with the word Paint to the "yellow pages/411" number, paint companies can pay to be the one who gets to reply.  Messages could also be sent by multiple companies who have chosen that as one of their words. 

Fourth idea, requires phones with WAP capability, meaning it can access the Internet.  I've priced it and a WAP capable phone runs about $15 more expensive than the cheapest phone in Kenya (around $25).  This means that they are not completely out of the reach of the poor, who most already have a mobile phone.  With WAP, a Kenyan could download a Craigslistesque application where people could list and search for services, products, jobs...and all for free.  Not only would they work well for business groups, but they could also be set up for advertising within small towns, churches, even Nairobi.  They'd be mini-intranet sites.

The rest of the ideas involve the inner workings of CHESS, Gitithia and other business groups.  SMS messages could send headlines of their newsletter with replies giving members more information.  A message could be sent to all members that they can forward to friends and family encouraging them to join the business group.  A form of e-receipting for loan payments could be developed.  Also instant reporting of loan payments made at the rural branches.  Surveying members to get feedback and stats to measure the groups' effectiveness.

Well this post wasn't intended for me to give a laundry list of ideas it was to encourage you to email me or post ideas in the comments.  We're trying to think outside the box on ways for us to communicate with members, ways for them to get in touch with us, and most important: how members can better connect with other members.  Thanks in advance.

Kenya Premier League Football

Not sure why I've waited so long to write about the opening game for our friends' Kenya Premier League soccer team.  A bit of background: one friend is the general manager of Nairobi City Stars and the other is a player (both Americans and the first ever non-Kenyans to play or manage).  It is a great ministry intended to reach the millions of football fans in Kenya.  The players of the team are believers and they have very receptive audiences in the slums when they bring the gospel and positive messages.

So, the reason for the post.  Lydia and I are huge fans of the team and attended the opening game of the new season which was held at Nairobi City Stars' stadium.  The opposing team represents and is cheered by a single tribe - the Luya.  This is the case for several teams and usually leads to passionate fans because the team's success or failure is a source of pride or shame for the tribe.  

As the 60th minute approached the game was still scoreless.  Personally, I was okay with that fact because it was clear that the AFC Leopards fans outnumbered NCS fans, no joke, 100 to 1.  And boy were they rowdy.  Tearing down signs and breaking into the stands because it had reached capacity.  In my thinking there was no good scenario.   Opposing team scores and their fans go wild and there is a riot afterwards.   NCS scores then AFC fans go wild with anger and riot afterwards.  I was partially right.  Our team scored and the opposing fans went crazy knocked over the fences and charged the field in order to end the match in hopes of it being rescheduled.  

That would have been fine but the fans proceeded to riot - throwing chairs and tearing the stadium apart.  After chasing the team into a locked room, they proceeded to come start fights with our meager cheering section.  At one point they filed out of the stands and demonstrated their anger in the street outside, blocking us from escaping to our vehicle.  

With only ten police officers, security had no hope of controlling the mayhem.  The crowd finally scattered after a teargas/gunshot was fired.  The only problem is this angered the mob enough for them to start hurling stones.  I've never seen anything like it.  Almost like in a movie when a volley of arrows comes over a castle wall.  That's what it was like but rocks over a ten foot high perimeter wall.  We found cover under the overhang of the building where the team hid.  The rocks slid off the roof in front of us and piled up as ice does in a hail storm.

Finally, we decided to brave the crowd and rushed to our car through some angry football fans.  I was worried the car's windows would be smashed, but thankfully before the game our Kenyan friend overheard a security guard mumbling about the likelihood of our car being stoned in my original parking spot.  After hearing this, I moved it to behind a building where it was safe.

I didn't dare take out our camera during the incident which I am kicking myself for now.  The picture below is from one of the local newspapers.  The reporting on the incident was horrible.  Making it seem like the fence fell over and fans "spilled" onto the field on accident.  The truth is they tore it down and charged onto the field.  The league officials recognized this and according to their rules, teams are responsible for the actions of their fans.  Hence, the game was awarded to the Nairobi City Stars and the other team has to pay for some of the repair costs.

http://www.eastandard.net/sports/InsidePage.php?id=1144006197&cid=38&

Recent Business Visits

January was a busy month in the field.  Here are some pictures I snapped of proud entrepreneurs and their businesses.  They all belong to the Christian Entrepreneurs Savings Society.  We were visiting them to see how to best serve them with trainings, new loan products and better networking among members.

An explanation of how we help entrepreneurs

It took me a little while to understand the framework we're using to serve entrepreneurs here in Kenya.  And if this is what I do full-time, I can't imagine how you, my family and friends, are able to figure it out from a distance by piecing together blog posts and newsletters.  With hopes to give you a clearer picture of our work here, I'd like to profile one of our partner business groups - Githia Rural Agro Finance Group - and explain how we serve its members.

Gitithia started as a ministry by a pastor of a small country church who wanted to help his parishioners find ways to start businesses and employ others in the community.  This humble beginning belies the now eight branch, 2,500 member savings and credit cooperative.  With locations spreading across three provinces -Nairobi, Central, and the Great Rift Valley - entrepreneurs at any given time are using around $1 million worth of capital to start or grow their business.  The majority of these funds come from members' savings.  Partners Worldwide serves as a supplement to their savings, helping meet loan demand during difficult times like the months of violence following the recent presidential election.

While this broad picture is helpful in understanding Gitithia's size and scope, it is not the way most business owners view the organization.  Members identify most with their local branch and cell group.  In cell groups, entrepreneurs have fellowship, discuss difficulties and offer support to each other.  Fellow cell group members also often co-sign each other's loans.  Trainings and business counseling take place within each branch.  A good example of this is the financial management seminar that my dad put on for the Kimende branch.  

Gitithia's leadership invited my dad, both a businessman and a farmer, to share with the group of farmers and micro-enterprise owners why keeping books is important.  He also gave them practical ways to organize records and how to use them in business planning.  The training was a hit and members stuck around afterwards to seek further advice on their businesses.  We are looking forward to a followup meeting with the business owners to go over their records for the month of January.  With this information, decisions can be based on numbers instead of hunches.

Beyond the assistance we provide to the business owners themselves, Partners Worldwide works directly with our partners' boards of directors and management personnel.  In mid-January, we helped Gitithia's board analyze their priorities and begin focusing on what was both urgent and important to managing their recent growth and entrance into urban areas.  Together we concluded that creating several new loan products, updating savings incentives, and improving loan tracking and recovery would help them better meet their members' needs.  In the coming weeks, we will be helping Gitithia's staff to take action on these three items.  We've actually almost finished implementing new loan tracking software. One down, two to go.  Other ways we've served the management: helping put on trade fairs, assisting in surveys of the membership, and creating newsletters.

You might be asking yourself how this model compares to other micro-finance institutions.  During my experience I've found that these elements make Partners Worldwide stand out from the rest:

-We only work with groups whose mission is to serve God by serving people.  Members are often Christian, but sometimes Muslim, Sikh or have traditional African beliefs.  What a wonderful opportunity to witness!  Meetings are started with prayer and worship.  True fellowship is exemplified in cell groups.  Grace and mercy are shown when members with loans hit hard times.  When banks, other micro-finance institutions and loan sharks would snatch up collateral at the earliest signs of default, we help refinance and find mentors for these members.

-Partners Worldwide doesn't lend money and sit back waiting for it to be repaid.  We get in their and help educate and equip business owners to open that second location, plant that new crop, or buy that new piece of equipment.

-Some U.S. based organizations like to dictate what happens in each project in each country where they work.  Our model is based on the idea that the closer a decision is made to its benefactors the better the decision.  That's why North American partners visit their counterparts in the developing world - so they can transfer their skills and experiences to educate decision makers overseas.

-Businesspeople crave ways to serve.  Most missions involves health care, education, skilled carpentry and preaching, leaving other professions to paint walls or pound nails.  Experienced entrepreneurs have a wealth of knowledge that, if given the chance, could be used to help grow businesses and create jobs.  Partners Worldwide gives businesspeople this opportunity. Offering a helping hand rather than a handout is a sustainable way to serve the poor.

I could go on, but hopefully this gives you a better understanding of what it is we're doing over here.  I'd love to discuss this, so post any questions in the comments!

Sense of Security

The thought of moving to Africa originally worried me. The general impression of lawlessness was overwhelming, especially the thought of bringing my wife here (and one who works in the Kibera slum!).

After several weeks without incident, it was easy to begin relaxing into our new home. We have guards at our apartment complex, barred windows and a huge steel gate on our door. We feel safe.

That is until we have one of those conversations that brings us back to reality. Friends and coworkers sharing stories about recent car-jackings, muggings and break-ins always puts me back on my toes. 

Yesterday evening, Lydia and I had one of those conversations with missionary friends who live nearby. We found out about a man who had four teenagers pull semi-auto rifles on him as he was pulling into his home at 9:30pm. The group took him to an ATM to withdraw the maximum daily amount. They then forced him deep into the slum and waited until midnight in order to withdraw the next day's limit. Thankfully he was released, but this often isn't the case. Sometimes they kill the victim so as to not be identified. Which begs the question: cooperate or fight/flee?

I have gone through several of these cycles of being lulled into a sense of security and then shocked by stories of violent attacks in our area. Another shock to my system is the tragic mishaps that are all too common here.  

On Wednesday, a huge supermarket went up into flames after a power surge started a small fire that spread to cooking gas canisters stored indoors which began exploding. After evacuating what the manager thought was everyone, the doors were locked to keep looters out of the store. The Red Cross has yet to set a final death toll from those accidentally locked inside, but the last count was 25 bodies recovered. Nairobi's four fire trucks were unable to do much good because the nearby fire hydrant didn't work leaving the closest one a mile away. The Kenyan Air Force and private fire engines (yes you have to hire a fire truck here) were only able to control it many hours later.

We just heard news of a petrol truck exploding in the Rift Valley killing at least 111 people.  It had overturned and people ran up to collect the spilling gas just before it caught fire and exploded.  Unfortunately, this isn't the first time this scenario has played out in Kenya. This morning, our church spent time praying for the family members of the victims of these two horrible accidents and for a general redemption of the country. One can only imagine how desperate a person would be to risk their life to gather several dollars worth of fuel to sell.