Ex-banker turns desire to help poor into microfinance business

Jubilant Kenya chief executive Cyprian Kilonzo during the interview at his office in Nyali, Mombasa, on Friday. PHOTO | LABAN WALLOGA
Jubilant Kenya chief executive Cyprian Kilonzo during the interview at his office in Nyali, Mombasa, on Friday. PHOTO | LABAN WALLOGA 

Growing up in Kibwezi, Makueni County, Cyprian Kilonzo witnessed his colleagues drop out of high school due to a lack of school fees, and thought of ways of assisting them.

He would buy lottery tickets for Sh20 hoping to win and use the money to pay their education. After buying the sweepstakes dozens of times, he was disappointed as he never won even once, leaving his colleagues staring at a bleak and uncertain future.

This disheartening circumstance saw Mr Kilonzo vow to one day open a financial institution that could provide more solid solutions to families such as those in rural Makueni. And he did.

Mr Kilonzo, 32, together with a few partners, operate Jubilant Kenya Limited, a microfinance with 10 branches across the country — mostly in rural areas — providing financial assistance to more than 10,000 customers.

“I was not happy because seeing my colleagues in want since I knew their lives would end miserably and perhaps some of them would become criminals,” he told Enterprise.

“This was the time I thought of how their parents could access money to support their education.”

After sitting his Kenya Certificate of Secondary Education examination in 2003, he relocated to Nairobi and started selling second hand clothes at Toi Market and also doubled up as a pastor in the nearby Kibera.

He then joined the Technical University of Kenya (former Kenya Polytechnic) to undertake a diploma course in business management which he completed in three years.

He took up a sales and marketing job with Standard Chartered Bank in Nairobi after completing his studies and later moved to Barclays Bank’s Machakos branch to do the same job.

Faulu Kenya in Mombasa was his next stop where he was employed to sell loans to teachers and small-scale traders.

Mr Kilonzo’s experience at the three banks further fuelled his desire to set up a microfinance institution but this dream faced a familiar and major hurdle — seed capital.

He decided to draw a concept paper and go on a fundraising drive, pitching the idea to about nine people — all salaried professionals — whom he met during the course of his day-to-day business.

Steve Muia, now the Jubilant Kenya Limited chairman, was one of them. He organised a workshop at a Nairobi hotel where Mr Kilonzo was asked to present his business case.

“At the end of this session, six people were for the idea and they agreed to inject funds to start the microfinance. It was a dream come true for me as we opened our first branch in Kongowea in 2012,” said Mr Kilonzo.

Starting off with an investment of about Sh1 million, the microfinance has grown its capital base to about Sh33 million and a share capital of Sh100 million.

The credit-taking microfinance disbursed his first loan of Sh250,000 in June and today, their loan book stands at more than Sh300 million with most of the funds having been disbursed to low-income earners including farmers.

Jubilant Kenya has in the past four years grown to 10 branches in Nairobi, Kibwezi, Machakos, Kitui, Emali and Mombasa (their base) which are manned by 50 employees.

“Of course there were challenges such as slow acceptance of our products but we have managed to surmount them,” the entrepreneur, who went back to college and obtained a degree in finance, said. “You see, those people who run small businesses may not have much money but they have the will to repay. We give loans to farmers in the rural areas who want to buy something as simple as a water tank which means a lot in their lives.”

Early this year, he started giving loans to reformed prostitutes from Mtwapa. Currently, 60 of them are accessing financing to carry on with small businesses including hair dressing, selling clothes and detergent making.

When NTV Kenya aired a story on sex workers last year, Mr Kilonzo saw a business opportunity.

He approached the International Centre for Reproductive Health which was rehabilitating them and proposed that after going through the programme, he would take over from there.

“You see, convincing them to quit the trade is one thing but if they are not engaged in any income generating activity they will be tempted to go back to prostitution,” Mr Kilonzo said.

Three months ago, Mombasa-based Jesus Celebration Centre, headed by Bishop Arthur Kitonga and his counterpart Wilfred Lai, bought a 25 per cent stake in the business.

Mr Kilonzo says the company is in the process of selling a further 15 per cent stake to his more than 10,000 clients and five per cent to his employees in a divestiture that will leave the founder shareholders with 55 per cent.

The entrepreneur says the goal is to transform Jubilant Kenya into a commercial bank that will be based in the rural areas with no branch in town but he will serve the urban clients through mobile banking.

“We plan to end next year with a deposit-taking licence in what will mark a key milestone towards our dream of becoming a fully-fledged bank,” he told Enterprise.