When Richard Muteti was appointed to head the jua kali sector, there were no structures and players could not access funding and the right market for their products. He spoke to PETER MUIRURI about the changes he has made in the sector
Walking with Richard Muteti on the streets of Nairobi, one would be mistaken for assuming that he is the city mayor. In every corner that we turned to, he received knowing glances, acknowledging greetings from street vendors, taxi drivers and patrons in restaurants. But then, that is the treatment you expect to be accorded a man who is not only the chief executive officer of Kenya National Federation of Jua Kali Associations, but also the chairperson of Koinange Street Business Association for the last eight years.
In addition, Muteti is the brain behind the Small and Medium Enterprises (SME) Handbook for small business owners in Kenya that was launched by Trade minister Chirau Mwakwere in September last year.
Having worked with the informal sector for some years now, Muteti is zealous about the initiation of projects that will benefit the youth in the country, a passion that was easily discernible as we sat down for an interview recently.
“As head of the jua kali sector in Kenya, my main objective is to bring together all the players in the industry and organise them in a way that will attract funding from both the public and private sector. I also identify markets for finished goods,” says Muteti.
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When he entered the sector, Muteti found it in shambles, with the name ‘jua kali’ being associated with failures. In addition, there were many traders in diverse fields who called themselves jua kali with little or no recognition from the authorities.
Small Medium Enterprise
His first task was to streamline the segment by giving a clear definition of what constituted the jua kali sector — either as an artisan or producer. According to Muteti, the sector has been greatly misunderstood, with many linking it to inferior products and those who may have failed to secure the so called ‘good’ jobs. This is a myth Muteti set out to dispel.
He says: “After taking stock of all players in the industry, we came up with at least 18 sub-sectors that represented the different occupations. Some of the groups include jua kali (artisans), small traders (hawkers), service providers (mechanics and repairmen) and agro-based (small farmers). We had to see the sector for what it really is, an SME.”
The odds stacked against him in streamlining the sector were high.
“When I was told to head the sector in 2006, I found a huge office, large parking space but no files or personnel. In addition, there were over 800 jua kali associations strewn all over the country. Nairobi Metropolitan Jua kali Association has 165 primary associations. I had to visit all of them and a get a glimpse of their operations. Then there were the many complaints that the sector produced inferior, poorly designed products. It was so overwhelming that I wanted to resign after only four months in office,” recounts Muteti.
Credit rating system
But he soldiered on, identifying five areas that needed immediate attention. They were: Lack of access to affordable credit to the jua kali sector, lack of proper working sites, lack of appropriate training in one’s area of expertise, absence of a ready market for finished goods and little exposure to the artisans and small traders.
Owing to its nature, not many financial institutions were willing to offer credit to SMEs, terming them unstable. Yet, this was an industry that was contributing almost 20 per cent of the country’s Gross Domestic Product besides being the single biggest employer in the country at over 70 per cent.
“We have since formed a credit rating system to ensure that SMEs get loans from banks without the need for collateral,” he says.
The resilient Muteti approached several government organisations to explore ways of handling some of these challenges with encouraging results. These included Kenya Bureau of Standards, Kenya Industrial Research and Development Institute and Kenya Industrial Property Institute — institutions that have greatly helped in standardising jua kali products, making them locally competitive.
He also arranged to partner with relevant groups in other East African countries in order to expand the market for those in local SMEs.
As he says, there can be no better deal than to link small traders with others in the region. Being the project manager of the East Africa Community Jua Kali Exhibition, Muteti has made arrangements for local jua kali traders to visit each of the East African countries on an annual basis for a learning process.
“The jua kali industry has the potential to earn the country billions in foreign exchange if proper training and funding is channelled to the sector. You will be surprised to know that part of the president’s casual wear was made by a youth from Nairobi through a small loan from the Youth Enterprise Fund,” says Muteti, who also sits on the fund’s board.
Muteti says the youth in Kenya have been neglected for too long yet there is no way the country can achieve Vision 2030 if attention is not directed to this group. He says youths should be the ones to drive this agenda.
“It is not just enough to create a fund and dish it to the youths. They also need mentorship. We especially need to assist those who have already started small businesses such as carwash,” Muteti adds.
The youth enterprise fund, says Muteti, is not for idle youths, but for industrious ones who have a good business idea that has the potential to grow.
“Others have confused the funds with the Kazi Kwa Vijana initiative under the Prime Minister’s office,” he says.
Muteti also realised that too many people claim to be in the SME category yet they haven’t been registered. Some, he says, are “briefcase SMEs complete with non-existent directors”.
Muteti has assisted many groups get registered to enable them benefit from the many business schemes, but he says the Government needs to do more than registering SMEs.
“Although Kenya is way ahead of other nations in streamlining the informal sector, we would like to have a situation like that in India where there is a fully fledged ministry that deals with SME promotion. We are also lobbying the government to spend at least 25 per cent of its procurement budget in buying items from the informal sector,” says Muteti.
Muteti faults the country’s education system that only trains people to be employees rather than entrepreneurs. In contrast, India trains people first as entrepreneurs able to create businesses.
He is thankful to the president who has honoured all jua kali exhibitions with his presence and Parliament for favouring the registration of micro, small and medium enterprises.
Business smart from a young age
I was born in 1969 in Kibwezi, but schooled in Nairobi’s Jogoo Road Primary School. I went to Ofafa Jericho Secondary School in 1984 before joining Eastleigh High School in 1988 for Form Five and Six.
Life was difficult for my mother and I in the wooden house we lived in. To make ends meet, I used to save my bus fare and later lend to people who would pay with interest, the shylock style. I started a business with Sh400 and was so excited to earn money of my own. I constructed a small wooden house for myself. However, in the hurry to own a home in Nairobi, I forgot to put any window and only realised this when I moved in. However, there were spaces in between the wooden planks that served as ‘light holes’.
Thankfully, I was able to study at Mangalore University, India, where I graduated in 1993 with a Bachelor of Commerce degree. I am currently pursuing an MBA at Copenhagen Business School in conjunction with Inoreero University.
I met my wife Caroline at a Salvation Army church function. She was playing the tambourine while I had come to assist my friends carry musical instruments for a competition in the same church. We had a small chat at lunch hour. She thought I was funny and I was attracted by her humility. She later went to Germany while I went to study in India. We communicated through letters.
We later got married and now have two daughters, Richelle, 15, and Davina, 14.