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Start small, beat odds and become a millionaire

By JOHN KARIUKI | January 7th 2015

Do you occasionally feel the need for a little inspiration on your road to wealth creation? Perhaps, like me, you love to read about people who started small and beat all odds and made a dramatic rise in their financial situation.

You certainly must have read the rags to riches stories of Ingvar Kamprad, the Chelsea football club owner Roman Abramovich, Oprah Winfrey, Micky Jagtiani and the British author JK Rowling of the Harry Potter series who progressed from living on welfare to multi-millionaires within five years.

But one needs not look far for inspiration. Many local examples of people who have made spectacular financial journeys abound. From some former mali-kwa-mali proprietors, to taxi drivers, who are now worth millions and live in leafy suburbs, Kenya teems with many untold rags to riches stories.

Frederick Njama, a credit officer with one bank agrees that the progression from rags to riches is real. He recalls the case of a client who began small and baffled everybody with his meteoritic rise to riches in a mere three years. “This customer was in the cereals business and started out with small loans of Sh20, 000,” says Njama.

He would hawk grains on a bicycle and measure out small portions in tins and goro goros. With his initial credit, this man bought a better and stronger bicycle and rented a store for his merchandise. He soon progressed to borrowing credit from Sh70, 000 to over Sh100, 000. According to Njama, this entrepreneur expanded his business and diversified his portfolio, a critical element in creating wealth.

He entered into large scale wheat and maize farming. This businessman now takes loans upwards of Sh2 million and which he often repays ahead of schedule, thereby saving on interest! At a conservative estimate, Njama surmises that this businessman is now worth over Sh10 million.

Zachary Mwaniki, a personal banking officer with another bank, agrees that rags-to-riches cases abound locally. He remembers the case of a Nakuru supplier who started out small with a credit of Sh50,000. “He would supply odd things to companies like detergents and computer ink,” says Mwaniki. At some point this businessman added printing paper and stationery to his portfolio and his loans progressed to Sh100,000.

Things got a little tight for this entrepreneur and Mwaniki remembers him seeking to reschedule payment of his loans owing to the tough business environment. This entrepreneur was able to negotiate for an additional loan of Sh500,000 as a way out of his financial woes. “He had a water tight project and the bank grudgingly gave it to him and this was his turning point,” says Mwaniki.

He adds that this businessman flew to China to prospect for supplies and he has now grown into a major supplier whose area of operation includes Southern Sudan. He has since overcome his initial obstacles and now regularly takes loans of up to Sh5 million,” say Mwaniki. According to Mwaniki, this businessman could easily be worth over Sh50 million.

Khalfan Riziki, a personal banker, has followed the rags-to-riches journey of a tailor with awe. “This man began small on the city outskirts as an ordinary tailor,” he says. The concept of boutiques was just catching on in Nairobi and this man moved to the city centre where he rented a room in a large exhibition centre.

He would take small loans of Sh10,000 to buy clothes for sale in his rented room. Back in his rural home, this man had a tea farm.

And with the proceeds from the sale of tea, he borrowed the balance to make a million shillings with which he flew to Dubai to import new clothes,” says Riziki.

His first consignment sold out in a matter of days and he began flying out regularly to get more supplies. Three years down the line, this businessman learnt of a building that was up for sale down the street. It was selling at Sh20 million.

He was able to raise Sh9 million and borrowed the balance of Sh11 million for purchase of the building. He renovated it and rented it out for a monthly income of Sh1 million. Within two years, he was able to repay his loan in full.

As we speak, this man, who has other rental buildings in several Nairobi estates, could be worth at least Sh 600 million.

These tales teach us that one needs to take risks to build wealth. Risk taking does not mean uncalculated adventures. It means weighing up all the options and taking the plunge when the time is appropriate.

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