what we don't say out loud.

May 25, 2017
by Kate Mwamba

In the shoes of a salesperson

 Salespeople makes up the majority of work force in the world and am glad I have done my share of contribution to this estimates. Majority of companies needs 50% of employees in the sales front to promote its products/services. They form the image of a company.This profession is majorly unlike any other .It is a career that can quickly raise or lower your status in the society, here is a look at why

Networking-Sales is an industry where you can build networks with your acquaintances, business partners, friends and anyone else, there is no limit to what you can and cannot do. However this is not an easy profession, the pressure is immense and every reporting and deal is dealt with at the most urgency, if you miss a chance to close a deal then that is it, it’s gone! .You find that you forge close bonds with the relevant people in this profession as you work through it and mostly for the rest of your life.

Unpredictable-Most of these careers got little or no basic salaries and you have to work with commissions structures only, now this where financial discipline comes in. Smart budgeting should be applied as you slowly hit your sales goals and deal with the unpredictable future which could take months or weeks ends on.

 Experience-There are many successful entrepreneurs who started their careers in sales, and this isn’t coincidence. Working in sales provides experience that almost no other role within an organization can match. “Nothing happens until someone sells something”, and people-*e who can’t sell will have a limited skill set that can limit options. Every employee should learn to sell their product, their vision, and themselves.

Dollars-Please raise your hand if you do not like the dollar look in the pocket or your account, I doubt if there is anyone rising theirs. Sales Job is an open Bank cheque, you just need to write down the amount you want to earn unlike any other job, and often times end up making more money than management does .One of the biggest ways sales can change your life is the money you’ll make if you’re a competent sales rep. This is the professional to be if you can communicate well.

Hardening –Constant rejection and pushing through leads and conversions of sales are all part of hardening up and building resilience and in a nutshell a successful sales life. If you can adapt and take control of your own destiny through those obstacles, it will be a skill that you can apply to all other parts of your life. To survive in sales, you need to accept that it will be stressful, and learn how to manage it in a healthy, consistent way.

Opportunity-In sales it’s easy to change careers from one industry to the next, not many other professions has this kind of advantage. The skills gained are easily transferable.

Excitement-The number one reason why I have always loved to be in sales front is that this job has no monotony. Every day has got its own challenges and you get a chance to start fresh and even meet new people or go to new places. There is so much exposure, you only have your to self to stop you from excelling. There is this rush that comes with conquering a deal or the other of failing to get a deal. The ups and downs of this job keeps this career exciting. Every time I lost excitement in a sales job it was time for me to pack and move to the next one.

As I grow into my career I have come to realize money is no longer a motivating factor in a role/Job. If it does not bring happiness and longing to wake up  in the role everyday then it’s not worth it. Life is not a rehearsal. Let work become part of your hobby that way it will bring a sense of fulfillment in your life and wealth will begin to stream in eventually.

May 9, 2017
by Kate Mwamba
1 Comment

Mother’s Day Chronicles..

It’s been a while since I blogged.I had been taken back by the way life can sometimes waylay oneself with little theatrics until you happen to meet that number one fan who loves your work and everything comes back to make sense, talents are meant to be shared. As I write, I can only thank God for the graces and mercies I have felt from him the last few months. Everything I value was put to test but that is not what am here to share with you tonight.I am simply here to comfort all mothers out there who make it real, as the world celebrate Mother’s Day there are so many stories each mother could share that portrays a woman as an important pillar in the Society.

The other day my 6 year old Daughter TK and I went for shopping and suddenly she was not behind me as I picked items off the shelves, I nervously turned around only to find her putting something in her mouth, I rushed back and asked her in firm voice to spit it out. It was a chewing gum she had picked from the floor, arrrrg…I was getting impatient with her

In a calm voice she asked me, “Why Mom?”

“It’s because you picked from the ground, it’s dirty and you don’t know where it’s been from.”

“But mom how comes you know everything?”

I thought quickly and said “All Moms know stuff. You have to pass mom’s test or they will not let you be a Mom”

We walked in silence for few minutes as she helped me push the trolley, I could see she was in some deep thought then she said,

“Ooh I get it, if you don’t pass the Mom’s test you become a dad?”

“Exactly”, I said.

I laughed the rest of the way home, yes, it’s a joyful and blessed feeling to raise children. Mark 10:14 When Jesus saw this, he was indignant. He said to them, “Let the little children come to me, and do not hinder them, for the kingdom of God belongs to such as these.





January 18, 2017
by Kate Mwamba
1 Comment

The tale of the 25 years of rule..

Have you ever heard of the story of the 25 years rule of a  man in an African family set….well I call it Karma and everything taught and said in it is totally true though I stand corrected…it goes like this…


Power is an underlying dimension of every family relationship and virtually every family activity, and its importance lies in the fact that having a sense of control over one’s life is necessary for the health and happiness of humans, including children, adults, and the elderly.

In the lifetime of most African family settings, there are 3 Dispensations of Power.

The 1st is the first 25 years in the life of the family (father, mother, children) where power indisputably rest with the father. The 2nd is after the kids have grown & started working when the power shifts to the mother. The 3rd is when the kids move out of the family house or start their own families when the power moves to the children.

We’ll start from the 1st Dispensation. Total dominance of the father. He is the Lion of the Tribe of his House. The boss. During this dispensation, the father rules with an iron fist. He barks orders & determines what does or does not happen.The father often mettes out corporal punishment to the recalcitrant children. They grow to fear him more than they love him. The father is the provider for the family & everyone is aware of that fact with all attendant consequences.

Then the 2nd Dispensation sets in. The children have finished school and have started working. Power shifts to the mother. When the children start earning their own money, for some reason, it’s their mothers they decide to look after. They are closer to her. While the father was in charge, he was busy with the business of providing. He didn’t have much time to be a friend to the children.

They spent more time with their mum and invariably grew closer to her. They also see their mum as co-victims of the father’s tyranny. The mother takes Centre stage at this point. She is the first to know what’s happening with the children & she has advantage. Should any of the daughters give birth, she is the one that goes for babysitting and the children spoil her with gifts. At this stage, the father is wishing for some bond with the children like they have with their mother but that boat has sailed. Because the mother doesn’t rely much on the father for her needs at this stage, she is less likely to tolerate his lordship. Friction.

Then the 3rd and last dispensation. Power has shifted to the children. They are self-sufficient, live on their own & have own families. More often than not, whenever there is a quarrel between father & mother, the children side the mother. Years of joint-victimhood at play. Children have been known to come to the house to warn their father not to ‘disturb’ their mother. Next thing, extended visitations. Woe  betide the father if his finances are precarious at this stage. You will be humble by force. The gang-up is real. This causes most men to fall ill & develop different complications. By the time the forces are arrayed against you, you will think well. Stroke, Hypertension, High-Blood Pressure. The man has a large family but no relationship with them in later life. Troubling thought.

The Moral, dear men, while the power lies with you, wield it with posterity in mind. It won’t be with you forever. With the way you are treating your wife now, how will she treat you when power shifts to her? What relationship do you have with your family? Loving dad or despotic, tyrannical provider? Remember, the children always side with their mother. Aim to do enough to at least get a fair hearing in future moments of family strife. Invest wisely for the future so that you won’t have to beg to be taken care of if despite your best efforts, you find yourself alone.No man is an Island.

Parenthood is not easy despite its joys. There is no manual on how it works. May God help us to make the best of a really tough job!

When it’s your turn please rule right!


January 5, 2017
by Kate Mwamba

Bootlickers thrives, until……….


As a young Banker, almost 10 years ago, it was my first foray into the corporate world, and little did I know that I was encountering the first specimen of what would turn out to be a special corporate species: Corporate Bootlickers therein referred to as CBs in short.

CBs are that special breed of people who don’t do any solid work, but they create an undetectable illusion of superior performance and capabilities through a range of perception management strategies. And as a result, they miraculously rise in the corporate hierarchy like helium balloons.

Corporate population: The basket distribution

Hard workers but not smart

People falling in this basket are highly competent and do excellent work, but unfortunately they lack the crucial ingredient required for corporate growth: Smartness. By smartness, I mean they are not fluent communicators and lack quick thinking on their feet. They may not dress as smartly as others and often project lack of self-confidence in meetings.

They are often overlooked for promotions, thanks to getting labelled as “not managerial or leadership” type. Being the weakest in the power distribution, these people often take up the most difficult and challenging tasks and also get blamed first when things go wrong.

Overall, they form the backbone of an organisation. (When they apply for leave, everyone worries about “Who will do the work?”)

Smart Asses and don’t work

These characters are incompetent and don’t care a damn about actual work or team’s or organisational interests, and simply stay clear of any direct responsibilities. While personally not doing solid work, they relentlessly and ruthlessly delegate, and use the characters in the first basket who work but not smart to get the things done. And when it comes to credit, they don’t mind gobbling it all.

They have one great strength, which enables them to sail smoothly: Smartness. They are master communicators and manipulators, and their body language is forceful. Projecting high self-confidence outside (even if they suffer from deep insecurities inside), they always give an impression of being a “driver” or “leader”.

They are often labelled as “leadership or managerial material” and enjoy steady growth in corporate hierarchy.

Excellent workers & also work smart

Few people are both great at work and smart to the optimum level. Deservedly, they rise to the very top of the corporate hierarchy.

I am sure you’ve come across a few exceptional characters in your career who are incompetent and irresponsible, but by the sheer power of their “talking talent”, they end up becoming bosses of more competent people. How does it happen?


Ideally, in an organisation anyone not performing and contributing to the hard results should not survive, leave alone thrive. So how do CBs rise? The answer lies in one word: Perception. What we perceive is often not the whole reality.

Unlike others, CBs know a little secret, which is their ticket to comfortable ride: There is performance and then there is perception of performance. Their game plan is:

  • Step 1: Surround yourself with the best performers and dump the real work on them.
  • Step 2: While work is taken care of by someone else, focus squarely on managing bosses’ perceptions, which means fluent communications, forceful presence in meetings and projection of “managerial/leadership” traits.

This two-step strategy works well in typically hazy corporate environments where how you look, talk and walk often obscures what you actually do when you sit in the chair.

So can you spot a CB in the crowd?

Classic symptoms

  • Hands off character: Who is like Teflon with nothing sticking to them? Who invariably stays clear of any direct responsibility for difficult, challenging work?
  • Busybody: Who stays busy with trivial stuff like attending useless meetings, touring here and there(MBWA)management by walking around, emailing, shuffling some useless papers, etc. instead of doing solid work that requires focused attention?
  • Exploiter: Who surrounds himself/herself with best of the people available in the office–and exploits them? They are typically like islands of incompetence in the sea of competence.
  • Resource sucker: Who wants more and more resources and always remains on look out to corner more people into the department?
  • Confident: Who projects dominant presence in the office?
  • Informant: Who excels in “keeping the boss informed”?
  • Chameleon: Who behaves nicely with bosses and clients, but ruthlessly with own subordinates?
  • Extra miler: Who does nothing solid during the normal working hours, but can’t stop “going the extra mile” by staying late, working on weekends–and even plugging in from vacation?

CBs thrive until…

The CB falls off when they suddenly meet a boss who squarely focuses on “performance”–and is too smart to be swayed by “smart talk” alone.

Years later to date, in most organisations, despite elaborate appraisal systems, perception of performance (staying late, talking smartly, acting confident, etc.) is mistaken as performance.

The reality of a person’s character, competence and contribution often lies behind the smoke screen of our quick perceptions.


                              Ignore the smoke!


December 29, 2016
by Kate Mwamba




photo courtesy

As I grew up from childish ways I realized I was a person who kept things to myself  so much and spoke out less. I was never confrontations neither talkative and most of the time I would hurt from other peoples actions and words and still kept quiet and built grudges within me.With time I have learnt much of my character through experience and Google (thankfully to Zodiac signs) of how to control and shield myself from things that are not within my control. You can never be everything to everyone.

As the year draws to an end I look at the highlights of what made the year so exciting. As for me the birth of my second born, Samara Taji, She rekindled my love for children even further. Secondly my career had stagnated but now am all fired up and living a life of purpose, yes I got a chance to start over again after so much giving, I feel alive!

2017 is almost knocking at the door, It’s never late to retrace what did not work out in 2016 and draft afresh because the longer you dance with the devil the longer you stay in hell. As we get older you can all agree that the less burdens you can carry around the better your state of sanity is; whatever is not necessary drop it and focus on the real issues. Go through all your memories and review them with your new-found insight. 

  • Find a counselor or therapist to discuss these feelings and how they affect you. Find a person with unbiased view of your situation this will help boost your self-esteem and offer a variety of choices for you to consider. Whatever you do please do not suffer in silence. Speak out!
  • You may wish to consider cutting contact. Surround yourself with positiveness. Negative people and negative thoughts are draining cut links! You owe yourself some protection..
  • Accepting what has happened to you and knowing that you were not at fault is imperative to the healing journey.Learn to lay the blame and shame exactly where it belongs, this will give you knowledge and subsequently the power to understand why you have suffered. It will help you realize the dynamics between you, and help you be able to deal with this in the future.
  • Use the forum and/or the chat room and share your story. By doing so you will realize you not are the only person to have suffered. Our stories are all different yet experimentally identical.
  • Learn to create and use boundaries so you don’t get sucked into doing things for others when you don’t want to. When caught on the hop and you feeling obliged to say yes, just take a breath and say “I will let you know if it is possible”. A perfect get-out clause when you can’t say NO. 
  • Self-care is very important and something most of us don’t bother with. Indulge yourself in pampering treatments as often as you can because you are worthy, even if it is only soaking your feet, putting on makeup or taking time out of a busy schedule to read a book.
  • Face your fears.It can be extremely cathartic to do something you are scared even to think of. Often the reality is never as bad as the imagination makes it, whether you are afraid of reptiles, making a decision or going to a social event. Feeling the pride of overcoming your fears will help you begin to grow your confidence, and will make you feel empowered.

  Love your life…………We are all survivors who can thrive.


November 27, 2016
by Kate Mwamba





After what seems like the death of traditional banking, Real estate seems to be taking the Kenyan market by a storm. The market is demand and supply driven. All over the Social media the campaigns to buy/Purchase properties are booming especially now as we head to Christmas holiday. The social media has greatly had an impact on the increased audience towards this drift. As campaigns towards the next general election heighten in the country and as well as the felt impact on central Bank’s reduction in Kenya Banks Reference Rate (KBRR) you would think that investment in property has slowed down.

Market research by Knight Frank indicates that “Sale prices of luxury homes in Nairobi increased by a modest 1.3% in the first six months of the year compared to a 2% appreciation over a similar period in 2015. While supply in the prime residential market has been growing gradually, local high net worth individuals looking to buy are only settling for best-in-class properties, with currently more options to choose from. The stability in luxury residential prices also reflects the relatively steady macroeconomic conditions, without major impacts from external shocks. Transactions are still happening in low volumes, as is the nature of this niche market.”

Good thing is Realtors have now ceased the opportunity and some of them are offering extended repayment terms. Some repayment stretch all the way to 5 years! Housing problems will soon be a thing of the past as these market is evolving day and night.

The just concluded KICC Homes Expo show cased hundreds of Realtors who had tailor made solution to their target groups. Did you know that you can now own a home without necessary going through the tedious Bank application procedure? Yes some realtors are doing it e.g Safaricom Investment Company (SIC). In most cases you only need to raise the 10% deposit stipulated on the sale agreement and you can now comfortably move in and enjoy all amenities whilst living in the property and making slow monthly instalment. Other realtors providing longer repayment plans to purchase plots or “shambas” at an extreme low monthly instalments stretching up to 36 months includes Enkavilla properties Ltd located at Trance towers along Tsavo road owned by Mr. Meshack Muhoho who has taken the market by a storm. Other realty companies are PRC, Urithi and the such who are competing alongside to dominate the marke

Why Real estate?

Tangibility. You can touch, smell and feel it! It’s Immovable too hence creating a sense of security.

Increased value in investment: Kes 1,000 today is not the same Kes 1,000 tomorrow, factors of inflation causes a depreciation in the value of money whereas Kes 1,000 invested in real estate is not the same Kes 1,000 tomorrow as real estate has 100% appreciation whether it is at 1% increased rate. Forward is forward no matter the pace!

Control: As a shareholder of a company, you have no control over your investment. And, you never really know what’s happening behind closed doors. In real estate investments when electrical bills are too high you can change the light bulbs to more efficient ones, seal the windows, and take other measures to reduce the costs. If you are losing money, you will know it very quickly! And you will be able to take measures to improve this situation. With most investments like stocks, what can you do if your shares in Safaricom drop 15%? You can sell more or you can buy more… that’s it.

Creative ways to make money. . Since you have control over your property, and there are three different ways to make money from the property, there are plenty of creative techniques to try to make more money from your asset. Some people rent out the garage separate from the house. In the right location, you could sell advertising space or just get price reductions on work done in exchange for some advertising you can add vending machines or laundry facilities, you can change the density of the property (add more units… more units means more rent), or you can change the usage of the property to sell it to someone who can make better use of it (if you are in a commercial area, an office developer might want to pay heavily for a properly zoned property to develop on). There are dozens of ways to turn a simple house into a money making machine with creativity. The same can’t be said for other investments.

Access to the Equity without selling the asset. With real estate, when you need a chunk of cash, you can refinance a property or take out a secured line of credit against the equity you’ve built up in the property. This means that you get to continue making money from the rental income on that property and someone else continues to pay down your mortgage. If property values are appreciating, you will continue to have an appreciating asset while you get the money you need

Real estate has a lot of tax advantages The Finance Bill 2016 proposed to scrap the Capital Gains Tax (CGT) on transfer of property from parents to their children and those of former spouses. In the past, only spouses and immediate family members in cases of divorce settlements were exempted from CGT. This will correct the anomaly in taxation of land whose gains have not been realised. The move will ease the succession process which traditionally would take much longer to effect property transfers according to Knight Frank’s Market report.




October 4, 2016
by Kate Mwamba

Organisational Bureaucracy……




Last week I had made a deal that prompted a new bank account. I walked into Equity Bank, Harambee avenue branch at 2 .15 pm i remember glancing at my watch. The sooner I stepped into the banking hall I was greeted by a maze of people. I got confused and lost at the same time before i regained my posture and sought to find someone to direct me around. I scanned around the banking hall and read through quickly the signage hanging high above each desk even though the crowd of people towering around those desks was overwhelming. I felt like I walked in a government office.

I pressed on onto one desk marked as enquires only to find out it was a service desk too. The lady behind the desk was talking on the phone while everyone stood patiently to wait for her to finish talking to the person on the other end. I was starting to get impatient, few minutes later I stormed out of there to look for a security guard, and he pointed me to the accounts opening desk. One desk had an attendant while the other was vacant and a queue of almost ten people was mounting before me. I realised there were three employees who were converging and talking in low tones near one of the printing machine behind the desks and I went forward to ask them if there was someone at the vacant desk to ease the queue that was piling at the accounts opening. I got blank stare before one of them asked me what I required and I poured my issues. She went into one drawer and pulled out three forms and was asked to fill and puf! She disappeared into thin air.

As soon as I was through I waited at the same desk for a few minutes before I woke up and asked the gentle man sited next desk as to the whereabouts of the person who was serving at my desk, I was asked to be patient as they would return. It took almost 10 minutes before she came, she signed the forms and stamped them and pointed to another queue, apparently I needed a second approval from her colleague. I tried to protest only to be told that, that was the bank’s procedure and she could not pass the papers for approval to her colleague who happened to be sited right next to her.

I was the sixtieth person on the queue. When it was my turn the sales person took my finger prints. He seemed to be experiencing an issue with his computer from his body language, I was now getting anxious and after several attempts to hide he eventually asked me whether I had visited Kigali branch, Jaw drops! My heart beat could be heard through my ear drums, I thought of all the possible frauds that could have occurred to the funds in that account. I asked for my bank balance before we proceeded.

The gentleman remained calm assuring me all was well although I could hear none of it until I had read the balance .When I thought we were done with the approval procedure the papers were again returned to me and was told to proceed to the operations office. Well I had had enough of this procedure; already 6 people were waiting outside her door for various approvals. I sat next to one lady who was half way asleep who added that she had waited for more than twenty minutes to see the operations manager.

I went back to the gentleman who served me last and demanded for the operations lady to be alerted that clients were waiting for her .Ten minutes on she showed up un apologetic. No one seemed to mind this treatment.  She was on the phone when it was my turn to get in her office. She finished her call casually and addressed my issue only to discover that my phone number had changed from the last time I operated the account. I was sent back to the first account opening desks with all my papers to seek other approvals and start the procedure all over again. I got stomach sick and at that moment I started to complain to her of how long I had been in the branch she reverted to her calls and ignored me. I walked out and went to pick RTGS forms I moved all my cash from that Bank. I decided to brave on all the queues and the whole tedious process and wasted another three hours in that bank but vowed never to return.

Read More:

Everyone has their own frame of reference, which heavily influences what they do and how they do it. Customers, for instance, care intensely about their own needs and desires but they don’t generally know or care as much about how companies are organized.

Employees also have their individual frames of reference; which often includes a deeper understanding of products, company organization, and subject ,If left unchecked, decisions made inside of companies will often reflect the frame of reference of employees, not customers. We sometimes call this problem self-referential design.

Here are some implications of this law:

  • You know more than your customers; deal with it. You can’t eliminate your biases, but it helps to acknowledge them. Recognize that customers may not understand things like product names, acronyms, and process steps that you regularly discuss at work. So there’s a natural bias for making experiences too complicated for customers. Get in the habit of asking yourself: “Would our target customers fully understand this?”
  • Don’t sell things, help customers buy them. Whenever you’re thinking about a customer experience, always try and frame it from the customer’s point of view. Look at all interactions as an opportunity to help customers to do something. How can you institutionalize this? Infuse the voice of the customerwithin your processes.
  • Don’t let company organization drive experiences. Just because you have separate organizations running your Website, retail stores, and call center does not permit you to make customers jump through hoops. Customers shouldn’t have to know (and they certainly don’t care) how you are organized.
  • .The bottom line: Make the shift from self-centeredness to customer-centeredness.



September 21, 2016
by Kate Mwamba

Finding my way…..



For some time now my family and I have been resettling back in our native home, Nairobi. For those who have lived in Nairobi know how fast life is in this town and how addictive the place can be once you are accustomed to its ways, I am one of such persons(wink wink),I love this place. There is only one mini minor little problem about this resettlement, the fact that I need a work plan. We thought through about where we would live and where the kids would go to school but a job or business to venture into seems to change with every awakening. You don’t want to restart your career or life after having gone for holiday for more than three years, huh the brain and the body do not seem to coordinate to this fact, but truth be told I must get busy.

Every now and then I am meeting friends or acquaintances who have great business ideas while others are hooking me up with recruiters .I am slowly taking up the challenges as they come. In one of my casual meet ups I was blessed to be in company of an older and wiser friend, Its in his words i found an ace i could keep;

“Do not be the weapon that sets against you. Do not be the voice that stops you from making things happen. You are too powerful for that ,so get to work and make more”

Character is greatest possession

Talent gets you to the door but character keeps you in the room. Be the person who is highly valued not because of the bank account or social status. Not because of your physical appearance or business acumen.

 Consistency and integrity earns the trust of others

Commitment means staying loyal to what you said you would do even after the mood has left you

– Proverbs 31:11-12

She consistently brings good to her family members and friends. She exhibits the highest loyalty and integrity, and due to these characteristics, she is trusted by her husband. Here consistency and integrity are central to her Godly character and set her above business women that are merely financially successful. The Proverbs 31 business woman is spiritually successful as well.

Carefully selects the best resources & products for your business

Wanting to provide to clients with the best that there is to offer, so you must do the research and the leg work to provide them with high-quality products and services, worthy of her good name.

Prioritize family and tends to their needs first

“She gets up before dawn to prepare breakfast for her household” – Proverbs 31:15a woman

Before anything else, serve family first, care for their health and express. Set family at the top of to-do list each day which sets you apart from other successful persons. A woman has to have her priorities in line with a healthy life/work balance.

Delegates work to others to maximize efficiency

Free up yourself to make you concentrate on the job you are good at. Define your task then decide who to allocate the task to, check if they have skills and resources, explain to them the task ahead, set the deadlines and expectations, support and constantly make communication, make follow up and obtain feedback

Carefully considers continued growth and investments

Do not remain in one spot. Do not allow your business to stagnate. With what money and resources obtained always consider growth and investment, both in business and personal life

 Share success with those less fortunate

Extend a helping hand and open compassionate, caring arms. Again, let Godly character shines through exhibiting not only a talented business person, but a kind -hearted child of God. In everything be humble!

“The Future is secure because your hard work has paid off”

August 29, 2016
by Kate Mwamba

Is Capping Interest Rate a Zero-some Effect?

Submitted by Kevin Gikonyo,

Former Banker,financial market consultant and a contributor to Nairobi business Monthly.


Harry Markowitz a renowned scholar corralled a theory in 1952, otherwise known as the Management Portfolio Theory (MPT). His empirical literature emphasized on diversification of risk and has been used in many settings, albeit most doers of MTP have never read it, simply because it was anchored on sheer logic. An example, if you happen to be an Olympian in a javelin contest, chances of making to the medal bracket are more when you make many attempts, of course “un-Yego-nically” stating.

Many businesses that have become industrial giants have made a mark and survived from periodic income shocks due to the fact that they diversified their income streams. The likes of Samsung, LG, and Apple to mention a few embraced this concept to the core and it has given them colossal returns. Locally, a classic reference resonates well, when we analyse Safaricom’s market dominance as a mobile service company, in the early year 2000 where Kencell, now Airtel, opted to concentrate on the high-end market thereby limiting its income stream to a chosen few. Safaricom chose to diversify and tap as many customers as possible through agents, per second billing and the now M-PESA money minting “technobank” mobile service and the rest is history.

The Kenyan Banking industry is no exception to these pace setting concept of diversification. The more customers, the more returns to shareholders. Equity Bank the 2nd largest bank in Africa after CBA Kenya, by customer base of close to 9million, used the same theory to dominate more than a decade ago and has recently posted a 10.1 Billion KES half year net profit ending July 2016, representing an 18% increase in profit compared to a similar period last year. Equity bank commonly referred to as a “Poor man’s” bank pitted KCB by March 2016 as the most profitable bank in the region. KCB held the mantle for several years as the most profitable, largest customer based bank and has slowly over the years been overtaken by Equity bank and now only retains as the biggest bank by asses base in the region. The latter will certainly be reversed soon to Equity’s bank favour, owing to the newest acquisition in DRCongo of ProCredit bank’s 79% share in September last year and propagation of Equitel mobile service.

While the concept has been used almost to a “near-perfect” by Equity bank, there is one bumpy aspect that seems to elude most players in the industry and has been subject to heated debates around interest on loans. This debate has been going on for years and has only maintained undertones and periodically resurfaced at eminence of economic contractions over the years. This year has been one of the toughest for businesses and for the first time in Equity bank’s history their loan portfolio shrunk by 6 Billion KES to 269 Billion, while that of KCB almost flattened to 347.3 Billion since December last year at 345.9 Billion.

Ms Waitherero of Standard Investment Bank (SIB) was quoted saying the shrink could be attributed to bank’s increase in choosing the quality of loans by lending to only those with good credit ratings. A keen look into the interest rates around the world, Kenya’s average of 18.3% at the moment ranks as one of the highest and the relation is somehow inversely related to developmental status of a country. With the most developed nations like USA, Switzerland, UK and Japan having the least interest rates on loans of nearly 2% p.a on average.

An unforgettable look into the past in 1993 commercial banks in Kenya chocked its customers with high interest rates that skyrocketed to 35% bringing most businesses to their knees. Auctioneers became a busy lot at the time and made a kill out of the misery of poor Kenyans who defaulted on loans. They defiled years of hard sweat for family business empires and companies without regard and the major exodus to SACCOs happened during this period. Some of the affected persons have never looked back ever since, from their once lenders and now “nemesis”. SACCO’s in Kenya have for the longest time charged 1% interest on loan per month and have enjoyed a growing lending book with limited records to show exact figures due to the closed membership status that does not mandate them to make public their balance sheet results. Their Non-Performing-Loans (NPLs) are always low, since most members access loans against their deposits or group guarantors as collateral.

Equity bank redefined the loan space by commercial banks nearly a decade later by offering loans for as low as 13% p.a giving to almost anyone who opened an account without the much stringent collateral requirements. As long as one could prove their capital venture is able to guarantee a steady income, they were eligible for a loan. However, that is slowly changing and in quiet quarters the initial loyal members of the once vibrant Equity Building Society (EBS) are feeling the bank is slowly taking shape of the other “Richman’s” banks.

interest-rate 2

The journey to clamor for reduced interest rates on loan by Kenyans has always faded disgracefully and blame for the status quo was placed on the movers and shakers of the economy that often had patrons in political circles or those in power were owners or big shareholders of the same institutions thus creating a conflict of interest. A case in history is the famous “Donde Bill” (Named after Hon Joe Donde, 1997 elected Gem constituency MP).In September 2000; he published a bill that sought to cap interest rates on loans and was unanimously passed by parliament and later on vetoed by President Daniel Arap Moi on grounds that it subverted the ideology of liberalisation. President Moi then had interest with Trans National Bank creating a same script different cast 16years on. A second attempt was tried in 2015 August by another Gem MP, Hon Jakoyo Midiwo and that of Sirisia MP Hon John Waluke.The former’s proposal was declined on technical grounds that any amendment to a finance bill must have been debated by stakeholders before approval by the budget committee and subsequent tabling to parliament, under rule 114 of the finance bill.Hon Mutava Musyimi’s led budget  committee deliberated on Waluke’s proposal and was later on urged to withdraw the proposal under grounds that Bank’s would regulate themselves amid a raft of measures to ensure they keep the interest rates to their bare minimum. That was short lived when at the end of last year commercial banks threw the economy into an interest spin again of close to 30%p.a on personal loans. Hon Midiwo had sought to cap interest rates at 3% above the CBR while that of Hon Waluke sought to cap it at 5% above CBR.

July 27th 2016 Kiambu town MP Hon Jude Njomo proposed a bill to cap interest rate yet again at 400 basis points above CBR (Central Bank Rate) currently at 10.5%.In addition, the bill proposed that banks give an interest on deposit of not less than 70% of the CBR, meaning banks will be forced to operate on a certain bracket margin based on CBR. The bill was unanimously passed on 28th July in a bid to reintroduce capping of interest rates on loans. CBR is usually determined periodically by a Monetary Policy Committee (MPC) within the central bank, chaired by the central bank governor. MPC usually factors the country’s inflation, major currencies foreign exchange position, monetary and fiscal analysis and global economic effects on Kenya in order to establish the value of CBR.

”Interest rates in Kenya are weird and an outright daylight thuggery by banks and capping should have been done 60years ago. We are trying to regulate interest rates, to the interest of our own people who have been exploited for long. If the president does not sign the bill into law we will take him to court. He should choose whether to safeguard the interest of Kenyans or that of a business man” said Awendo MP, Hon Jared Opiyo with obvious inference to President Kenyatta’s family and close allies the Ndegwa family who have interest in CBA and NIC bank respectively. Amid immense public and political pressure against that of his personal interest and those of the commercial banks, President Uhuru assented to the bill on 24th of August 2016 to the relief of most Kenyans who frenzied on social media upon assenting of the bill. “This is the third time that the National assembly is attempting to reduce interest rates to affordable levels. In the previous instances, dialogue and promises of change prevailed and banks avoided the introduction of these caps. In those instances banks failed to live up to their promise and interest rates have continued to increase along with spreads between deposits and lending rates” said President Uhuru in a well-crafted public statement that also sought to give the downside of capping interest but assured that his administration will closely monitor the volatility of the monetary effects of the law .Hon Rotich the Treasury CS had dashed Kenyan’s hopes where he had earlier in the week given a public statement saying ”It is time for banks to start making a decent income from lowering interest rates, although capping rates is the second best solution. Kenyans should be a little patient to allow government tackle the external factors that make the rates become high”. He promised in a public address to introduce a financial services authority bill that will ensure consumers are not exploited by financial service institutions.

The financial service in Kenya is second to none in Africa, according to Brookings Financial and Digital Inclusion report that evaluates access to and use of affordable financial services. Brookings institution, a U.S based non-profit making organisation in Washington DC does global research on economic, education and governance in domestic and foreign policy development. Most Kenyans feel the banks are making super profits and their only rush is to grow super profits to compete amongst themselves. A snippet data for last year shows a combined pre-tax profits for banks at a staggering 134 Billion KES in the 12 months through December and if this year half results are anything to go by, these figures could be in excess of 160Billion by end of the year. At the height of all these accolades Kenyans still believe that commercial banks are a preserve of the working, middle and top income earners in the country. They rarely support start-ups and kill the dreams of many young Kenyans even before they leave their beds of innovation and entrepreneurship. Most banks before you access any loan you have to provide 6months statement, valuable collateral or show proof of a steady employment income. The bigger share of the mass is left to the whims of government fronted corrupt loans schemes like Uwezo fund or SACCOs and “shylocks” where the later usually charges very high interest rates of up to 100% p.a or 10% per month.

I strongly believe the current debate is an advertent cry of accessibility to loans and not of high interest rates. The credit access bar has gone to another level with growing information sharing by the credit reference bureaus whose ones adverse listing leads to an outright lockout from mainstream lenders into the dungeons of hungry waiting “shylocks”. The argument to reduce interest rates is as divergent as the proponent’s and opponent’s personal attributes, more like the chicken and the egg analogy wanting to ascertain which one came first.

Commercial Bank of Africa the largest bank in Africa by customer base has a unique partnership with Safaricom’s  M-shwari platform. It registered the greatest jump in its loan book by close to 305% from 7Billion to 23Billion over the same

period last year. Accessibility of these loans over the mobile phone is amazingly fast at 7.5% p.m. Yes you might have missed it! Mathematically it translates to a 90% interest rate per year. Surprisingly this is indifferent to customer’s decisions and they would rather rush to get these loans from the comfort of their homes and less stringent requirements. This would essentially mean loans offered by CBA through M-shwari platform are the most expensive formalised loans in the industry at 90%p.a. and are not encompassed in the new law which only targets mainstream banking.

It is also true that interest rates are inversely related to a lender’s income, proportionate to the quality of loans and a function to accessibility of loans. A recent example of Family bank’s Six months results to June 30th 2016.The lender whose interest was the lowest at 14.8%-Source Central Bank Interest Rate Report grew its interest income by 34% to 6Billion,but declined its profits by 40% to 711.5 million compared to a similar period last year. These profit margins were eaten away by increased Non-Performing Loans (NPLs) that grew eightfold to make the provision for bad debts hit 299.3million thereby increasing its operating expenses by 30% to 3.8Billion.Hence the less your interest rate the more interest income and in order to sustain the proportional benefits then banks need to innovate and develop policies that will increase the quality of loans.

With 43 Banks ,12 Deposit taking Micro-finance,30 Credit only Micro-finance,199 SACCOs,5 Mobile money operators and 3 Credit reference agencies, Kenya is well placed to enhance a more robust financial inclusion above the current 75% one of the highest ratings in the world and the 1st in Africa. To the contrary there has been too much inefficiency, too much money idling in capital, that it created a” Devil’s” workshop in finding ways to use it including insider lending. These have since seized with the new “sheriff” in town CBK Governor Njoroge who is operating in full swing sending bank executives into panic mode in order to meet the previously ignored regulatory requirements. Some allege Mr Njoroge has gone-slow on his aggression because the expose on Bank’s anomalies were enormous and periodic surveillance was a compromise away from the public glare to avoid capital flight. Insider lending in family owned banks, unnecessary system upgrades and unregulated provisions for bad debt were used to hide the true position of most banks. Most shocking was the use of parallel systems in NBK that led to massive siphoning of funds even by junior staff according to Wanjiru who feared use of her names for fear of victimisation. She was among the staff who noticed the anomaly way before the interdiction of its executives. This practise made the unaccounted for insider lending at Imperial and Chase bank look like Child’s play and of course the government will always come to its rescue at the expense of taxpayer’s money.

Bank’s shareholder and owners have often placed high targets to the executives to increase profits by as much as 20% every year placing a huge burden to increase billions and sometimes without ethos. One of the tier one Bank’s CEO was tasked to increase profit volumes by more than 25% a year albeit that it was still making super billion profits .The low hanging fruit was to drastically increase ledger fees by more than 200% while issuing a short notice to customers who had no option but to swallow the bitter pill. These figures would amount to millions of dollars a year and a part-in-the back end of year bonuses would allow these executives to lavishly buy beach houses along the Mombasa coast on cash transactions basis at the expense of customers and overly strained junior employees. Most junior employees work more than 10hours a day to the ignorance of unions and banks association that play to the pipers tune. This pressure is so real that it has degenerated to drastic measure to reduce wage cost in order to increase profits by giving early retirements to youthful staff even those under 35 years of age rightly earning huge salaries under undue coercion.

With the new law, time is ticking fast and in two weeks after gazetting the new law will take effect. Unfortunately those who had taken loans before the Presidential assent will still pay with previous rates since no law applies retrospectively. Customers can however borrow a fresh loan under the new rates to offset the previous loans .Banks need to adjust into new frontiers of ensuring ultimate efficiency on capital and utmost generation of income. Tier 2 and below have to employ techniques of diversification faster than their tier one counterparts. These forms of diversification could be employed through myriad ways by;

  • Geographical coverage: Where technology can be used to bring a closer access to banks services and use of national agent in order to increase their ease of access to service.
  • Sources of Income: Where banks will need to engage in more few sources of income like banc assurance and investment banking.
  • Product and Services: Where the types of loans will need to be broaden to include intellectual property or innovations funding
  • Economic Sector: Where a move from the conventional industry players will be beneficial and a specialisation on such sectors could lead to loyalty since there will exist an indifferent cost on loans.
  • Sources of Capital: Where use of corporate bonds and other cheap instruments of capital will ensure banks are be able to sustain reduced loan interest margins.

The tier one banks will have an easier ride ahead since they will be able fund other sources of revenue. The smaller banks would result to reduce the risk on loans hence stifle access to loans and engage in more government securities that are other less risky or otherwise adapt a “hustlers” mentality to issue small loans to many Kenyans. Mergers, acquisitions and take-overs may be inevitable to some banks as interbank lending may soon become a high cost to maintain in order to meet their daily liquidity ratios. Kenya is still considered overbanked and bigger economies in Africa like Nigeria have fewer banks supporting their financial system.

The Eureka moment for Kenyan commercial banks lies in making sure loans are accessible as much as possible to as many people as they can following Markowitz theory of diversification. These techniques have so far been perfected by “shylocks” who enjoy massive returns from already locked out non-capitalised populace. Commercial banks need stringent policies to enhance borrower’s accountability, recovery and collection techniques to avoid a growing book of defaulters and allow increased loan assets. It is better to loan 10 people with 100,000 each than one person with 1million in order to reduce the cost of NPLs. It is working with CBA, Equity and KCB banks already. The biggest gain will be the corporates, SMEs and salaried Kenyans who will be able to access loans easily and cheaply as competition amongst banks to offer quality loans takes shape. Those away from these brackets may find it hard to access loans in the interim and an economic ripple effect maybe their mid-term benefit.


August 28, 2016
by Kate Mwamba

Tanzania Oust Kenya in Mega East Africa Projects

By Kevin Gikonyo,

Former Banker,financial market consultant and a contributor to Nairobi business Monthly.

Dr John Pombe Magufuli popularly known as “The Bulldozer” in his country, is living up to his nickname barely a year into his presidency. He was sworn on 5th of November 2015 after a hotly contested election since its independence, 54 years ago, by close to 9 million voters, of its 49.1 million citizens.

The 57 year old, doctorate of chemistry scholar from the University of Dare salaam, was elected on a platform to transform the economy by increasing youth employment, reducing corruption, provision of free secondary and primary education, amongst other CCM(Chama Cha Mapinduzi) country reforms agenda.

Magufuli’s  7th month “leadership chemistry” has managed to lock in major East African projects and unsettled Kenya as the main economic reference, in regards to infrastructural deals. Kenya has held the mantle of being the biggest East African economy since independence, but according to the recent signings and their magnitude, the button is about to shift to Tanzania, if it continuously replicates this growing impetus.

The southern neighbours have often been considered as the “unwilling partners” in the East Africa coalition for the longest time, since the formation of EAC post-independence in 1966. Many recall an emotional parliamentary speech by the former president Mr Jakaya Kikwete, who vehemently denied being uncooperative and rhetorically referred to other member states, as “coalition of the willing”.

There are many instances that asserts these negative noun, due to the red tapes against EAC business owners-primarily Kenya, the ban on Kenyan tour operators free movement to parks, implementation of free movement of goods and services under the EAC agreement, up to the recent pull-out from the EPA (Economic Partnership Agreement) pact, that sought to benefit EA trade with the EU countries and the list is endless. The later was a 14 year negotiated trade deal, whose disarray will hurt Kenyan exports to EU the most, since it is classified as a middle-income economy. A highly ranked economic stratus country enjoys little tariff concessions, unlike that which is least developed like Tanzania. “We have not pulled out of EPA as a result of Brexit, but for reasons of National interest to protect our nascent industries “said the foreign affairs PS Mr Aziz Mlima.

Historically the EAC cooperation existed before independence of the three nations of Uganda, Tanzania and Kenya and was declared untenable shortly after. Tanzania drew the first salvo by recanting the East African common currency among other agreements and fostered its own communistic path. An attempt to re-join the EAC in 1966 was shortly lived when in 1977 the rosy affair came to a dramatic halt, with Tanzania closing its borders with Kenya and ended up confiscating Kenyan owned vehicles, aircrafts and even detained some of its citizens amidst suspicion from Tanzania’s political class. Tanzania’s government controlled media denounced Kenyans as “business big shots “while the Kenyan government radio in turn claimed that Tanzanians “ talk all day and sleep all night expecting to be fed from the sweat of their neighbours”-Source 6th Feb 1977 Sarasota Herald-Tribune.


Twenty Four years on, the EAC union was rebirthed in a colourful launch in Arusha, Tanzania and its vice president then; Dr Omar Ali Juma stated that the cooperation should not be allowed to fail again. Tanzania’s recent political leaders have been quoted on paper as being pro-EAC, but they have always elicited pain to past wounds by their actions or inactions that have sought to sabotage the basic cohesion and mere renaissance of the 145.5 million community bloc.

As much as one may be desirous to fault Tanzania, they must be doing some things right for the past 5 years, which Kenya needs to learn. Their high GDP growth rate and ranking among the 6th fastest growing economies of the world are positions that affirm the leadership of the second biggest economy in East Africa.

EAC commands a combined GDP of close to 150billion dollars and has an average per capita income of nearly 850 USD according to EAC facts and figures report -2015.Kenya and Tanzania contribute close to two thirds of the total GDP of East Africa and the five year, 7point plus economic growth on the country once known as Tanganyika, is breeding a shadow contest with Kenya which has registered a dismal 5point growth since 2013.



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Tanzania boasts of natural gas off its coast and minerals such as gold, iron, copper, silver, platinum, nickel and tin; gemstones such as diamonds, tanzanite, ruby, garnet, emerald, alexandrite and sapphire among other stone aggregates. Kenya prides in fluorspar, rare earth, gold, gemstones, titanium soda ash and niobium deposits.

In 2013 Kenya, Rwanda and Uganda had agreed to link up their boarders with a modern Standard Gauge Railway line commonly referred to as SGR. The mega project was estimated to cost 13Billion dollars. Uganda first signed an MOU with Kenya in 2009 and later became a tripartite agreement that saw Rwanda sign In August 2013, committing to conduct a common joint study in order to realise this common goal. Kenya was to become the oceanic link to these landlocked countries that sought to shorten the movement of goods and people. This was never to be, at least for the part of Rwanda that has recently declared through its minister for finance and economic planning, Hon Claver Gatete that its SGR project will run through Tanzania.

Rwanda’s research showed that through the port of Tanga, the SGR would be much cheaper by USD 200Million compared to the Mombasa route that would cost USD 1Billion thus sighting this as the major reason to derailed talks with Kenya. Consequently, this meant that Burundi will be looped into the newly agreed Dare salaam-Isaka-Kigali/Keza-Musongati (DIKKM) route expected to be completed in March 2018.Mombasa to Kigali was expected to be complete by 2018, meaning Rwandese and Burundians would have had to wait longer to enjoy the benefits of SGR.

Another huge deal that slipped from Kenya’s hands is the pipeline project from Lamu to Kampala and consequently Rwanda, Burundi and DR Congo. In one blow Uganda bungled out and shattered Kenya’s dreams of becoming a key connection to this multi-billion dollar business. Uganda sighted the project would be close to 4Billion cheaper and faster through Tanga port that is already operational unlike Lamu port that is deemed to be completed in 2021,if they are lucky to get any infrastructural funding. Uganda’s production meant to start in 2018 ,has already secured French’s Total Company funding for its Tanga route with deposits valued at over 1 billion barrels of “black gold”, the biggest find in the region and equally huge gas reserves.

This new connection would be completed in 2020 from Kabale, Hoima to Tanga which is 1,400 km apart and the plateau much clearer than the ragged terrain in Kenya. Tanzania’s government owns these vast lands, unlike Kenya that has to deal with protracted land compensation battles and otherwise inflated land valuation claims that often benefit the Land registry and ministry officials. The security of the pipeline was also a main decider to dropping the Lamu-northern Kenya route, where there is almost no infrastructure and a lot of tension among communities in sharing existing resources and the pipeline revenues would only seek to complicate matters further. Kenya proposed to charge a pipeline fee of USD17 per barrel compared to Tanzania’s quote of USD12 per barrel, which also offered other incentives like waiving land fees, transit charges and taxes associated with pipeline transmission, a move that caught Kenyan’s project managers flat footed.

In the red is also the LAPSET (Lamu Port, South Sudan-Ethiopia Transport) project, where Ethiopia is in a “near shift” even after their PM’s visit to Kenya. Its minister of mines and petroleum Hon Tolossa issued a statement from Addis Ababa, negating Kenya’s position that they ever inked to a formal agreement and that it was only an MOU to guide a joint feasibility study on the viability of the project. Ethiopia is currently in advanced talks to use Djibouti as its main port and the two countries have just overseen the laying of the last part of the 752km electric SGR to connect the 2nd largest populous and land-locked country in Africa. Djibouti aims to earnestly get the SGR to South Sudan, Central Africa Republic, and Cameroon to connect from the Red sea to the Atlantic.

Kenya has boasted and rightly so, to be the biggest economy in Sub Saharan Africa north of Limpopo, although the torch may soon fade. The ground is shifting faster than Kenyans imagine and the much talked off pillar projects in successive regimes will soon be silhouettes in chronicles of history. Smaller countries like Djibouti seem to be in a race for time and focused to meet their MDGs sooner than later. Tanzania’s sharpened negotiating and deal making skills are just an indication that we need to relook into how we approach our cross boarder and internal projects of national importance. Abortion of the “Green field” airport expansion project is one of the misguided decisions that had poised Kenya to become the next “Dubai airport of Africa”. Dubai’s decision to expand the now 6th largest airport in the world 33years ago, is now finally paying off with their aviation industry contributing to 37.5% (26.7 Billion dollars) of their 2015 GDP through its famous duty free project.

Most of the projects have stalled, abandoned, taken more time due to corruption or degenerated into “talk big-less action” political tools. Questions on these mega projects abound like an abyss on; Why two Chinese state-owned enterprises; Third Railway and Design Institute (TSDI) and China’s Roads and Bridges Corporation (CRBC) were nominated to supervise and build respectively, the 324Billion Mombasa-Nairobi SGR project against a court of appeal order (Case No; Nai 282 of 2014(UR 210 of 2014)? Why have LAPSET investors developed cold feet and fees of USD 20million to Japan Port Consultants (JPC) recording as the highest feasibility fee in Kenya’s history? Why was the Parliamentary Investment Committee (PIC) report on SGR ignored? Why has Kenya abandoned the “Greenfield” project just three years after commissioning?

“The biggest threat to national security is corruption” are the very words of President Kenyatta. Our answers to losing out on mega deals may never be addressed. What is confirming to be true each passing day is that our Kenyan vision 2030 will just qualify to be a well written vision in theory while other regional countries patriotically lift themselves from bonds of poverty.

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