Impact Insights: 4G Capital in Nairobi marketplace

As part of African Business Magazine’s In Focus webpage, we take a look at how our chosen businesses are creating impact on the ground, by going and speaking to their customers. For this edition of Impact Insights we take a walk around Wangige market on the outskirts of Nairobi where 4G Capital, a micro-credit fintech providing unsecured loans, first tested their unique model in 2013.

Stepping out of 4G Capital’s main Wangige office – nestled at the back of a busy arcade boasting a butcher, hairdresser and a restaurant – it’s abundantly clear that the surrounding market is full of life. Local matatu buses scream past the busy streets as everything from sweet potatoes to shoes to Chinese telephones are sold in and around the impressive central marketplace, resembling something of an old train station. What’s of real interest, however, is that the market is also full of capital.

Mercy Njue, the former branch manager, explains how 4G Capital’s personal approach to their customers, combined with business training and an innovative tech-interface, has allowed unsecured capital to galvanize the Wangige marketplace. “4G Capital really takes pride in seeing that a particular customer is making more sales and expanding their business,” she beams. “We help them keep track of their expenses so they can repay their loans on time; and then access larger loans to buy more stock.” Following Njue’s lead in guiding us around the kaleidoscope of kiosks, the amount of friendly interactions and warm smiles she receives makes it hard to believe Njue used to be a loans collection officer. Some, she jokes, still owe her money.

Of those who we spoke to, commercial growth and expansion was the order of the day. Some even envisage a loan-enabled move to inner-city Nairobi where a second outlet would guarantee profiting from the urban bustle. “I want to invest so I can open another branch in town,” plans Patrick Ngore, owner of a local pharmacy. “You can make a lot of business there.” This entrepreneurial optimism has largely been driven by increased profits, he says, after signing up to 4G Capital around one year ago. “Before 4G, I used to make sales of between 2000 and 3000 Kenyan shillings per day ($20-30) but now with the loan I am able to purchase more stock and my sales have improved to almost 5000 shillings ($50) and above. If they give me a bigger loan I will go and open another branch because I know I will have customers.”  

Just around the corner from Ngore one of the local market women, or mama mbogas as they are known in Swahili, tells a similar story. Josephine Wambui Kariuki stands proudly over her tomato stall and recounts with great enthusiasm her commercial journey so far; moving from a 5000 shilling loan ($50) to 25,000 shillings ($250) every month. “Five years ago my business was slow but after I started coming to take some money, it is now up,” she exclaims. In fact, Kariuki has increased her sales by a factor of four – transitioning from selling just five crates of tomatoes per month to now selling around twenty. After the extra money has mostly been reinvested in the business, Kariuki tells me she is able to pay for her son’s education with the little left over.

Outside the grand fruit and vegetable marketplace, we cut through the throng and head down a small track leading to a residential area. On the side of the dusty path we are introduced to Ibrahim Gichuhi Ndirangu, an entrepreneurial trader who has managed to turn an old water tank into a permanent pop-up kiosk. “I used 4G Capital to build this,” he asserts. “I used to rent somewhere else, but then I bought a piece of land from the council and converted this water tank for a total cost of 22,000 shillings ($220).” The slightly odd-looking tank is stocked with fast moving consumer goods like rice, flour, oil and sweets and Ndirangu explains how it has helped him earn more money. “Before I was making around 7,000 shillings ($700) a month but now I make well over 15,000 ($1500).” Plastered on the side of the tank is piece of paper advertising his wife’s babysitting business, but Ndirangu tells me he will soon bring his wife to manage the shop while he sets up another tank closer to the marketplace.

Stories like these seem to ricochet around the vibrant Wangige market place. As the African Business team prepare to head back into Nairobi, we are only left pondering the scale of 4G Capital’s impact considering they are now in 70 markets like Wangige throughout Kenya.