- London School of Economics alumnus Suraj Gudka sets up social enterprise in Nairobi’s Mathare slums.
He is 21 years but let his age not fool you. Mr Suraj Gudka is full of passion for what he does and his desire to succeed in social enterprise is unmatched by most of his peers.
In the last year, Gudka has transformed what was a mere entry in a competition into a sustainable business that helps to reduce food insecurity in urban slums.
“When I was at the London School of Economics a friend came across the Hult prize (an international competition for social entrepreneurs) and together with three other students from the society of social entrepreneurs we decided to give it a go,” he said.
The challenge was to reduce food insecurity in urban informal settlements.
“We were all in different years of study and from diverse nationalities brought together by the passion for social enterprise. While the others knew a lot about the agricultural industry in their home countries like I did of Kenya, I had the advantage of previously working in slum areas and that is how we settled on the location of the project,” he said.
Gudka and his colleagues Verena Liedgens, Jonah Brotman, Carolina Medina and Sofia Zab came up with the idea of making food affordable for those living in slum areas by aggregating demand for food and increasing access to wholesale pricing for small traders.
Their idea saw them selected among the top 500 entries for the competition though they did not win. This did not deter the five ambitious youths — they entered their idea in an online league of the competition, emerging the best and listed among the six overall winners of the Hult prize.
“At that time we realised that we had been having a great idea but we had not gone to the ground to test if it really addressed an actual food insecurity problem. That is why I came back to Kenya mid last year and my two team mates, Sofia and Verena, joined me two weeks later to do the actual research,” he said.
Gudka said they mooted the Soko Text platform which they are constantly working on improving.
“A Mama mboga (grocery seller) in slum areas spends between two and three hours every day on travelling to the market and buying stocks, this can cost them up to Sh150 which is about 10 per cent or more of what they make on a daily basis. Soko Text tries to address the system’s inefficiencies,” he said.
For close to a month the three co-founders of Soko Text worked in different slums, shadowing mama mbogas and tracking various commodities like sukuma wiki from the market to consumption in homes.
Results of the research proved their basic food insecurity theory right and the team decided to run a pilot scheme with five women from Mathare slums.
At the end of the day, each mama mboga would send a text message in Kiswahili explaining the produce she planned to buy the next day and the quantity.
Each of the orders were aggregated according to produce and the Soko Text, ensuring that the produce would reach mama mboga before 9am the following morning.
“While we were shadowing them during research we realised that they also bought from other mama mbogas in the market and the fact that each of them had their own suppliers. If we could aggregate the orders then not only could we get the wholesale prices from Gikomba or Marikiti markets but also get wholesale costing for transportation,” he explained.
After purchasing the orders the researchers took them to a strategic distribution centre near Mabatini in Mathare from where mama mbogas accessed their stocks. It was not long before more mama mbogas registered for the project, rising to 27.
Seeing how the project had impacted the traders, Gudka decided to turn down an accounting job in London after graduation and returned home to continue with the social enterprise.
Today he has moved into an even larger distribution centre in Mathare, enabling him to serve even more mama mbogas.
“Initially the perception that many held was that this was a charity, they would ask for credit but with time I have instilled the discipline of a business which is exactly what Soko Text is.
We buy goods at wholesale prices, cut off some of the middle men and ensure that pricing is more affordable to the final consumer by reducing mama mbogas’ costs,” he said.
Among the challenges that Gudka faces is inability to engage in buying of goods.
“We tried it one time, we had gone to the market at 4.30am but when wholesalers saw an Asian they almost doubled prices. I had to hire someone whom I trust to purchase and transport the produce for me.
Meetings via Skype
‘‘We have also employed an intern to better develop our online systems and make them more efficient.”
All the initial five partners on the venture are still with working him despite some having moved back to their home countries while others got jobs elsewhere.
They hold weekly progress meetings via Skype. The startup, which is housed at the Nailab incubator at Bishop Magua Centre in Nairobi, has a website which helps to aggregate mama mbogas’ orders and identify products bought and rejected and reasons for doing so.
Soko Text recently received a grant from the Chilean government to replicate what they are doing in Mathare in informal settlements in Chile.
As a result, one of the co-founders will move to Chile to set up a replica of the venture.
“Rather than look at ways of giving charity to people living in slums, I would rather we look at ways in which we can engage them in business that helps to raise their living standards,” he said.
Gudka said that his wish is to open up several replica centres in other urban informal settlements in Kenya to increase poor people’s access to cheaper food and better incomes.