For a decade and more, Lawrence Lagat, 36, worked as banker for various institutions with the junk of it in Islamic banking.
That's all he knew until an investor approached him to set up a start-up, Buy Simu Technologies, which specialises in providing financing solutions tailored to the purchase of high-end electronic equipment.
"I'm a specialist in Islamic banking. That's what I did for seven years, especially on the documentation aspects of facilities like Musharakah, Tawarruq, Murabaha and things like that.
"I understand what is involved in Islamic banking," says Lagat, who is now the managing director and chief finance officer of Buy Simu Technologies.
Islamic banking is a financial system based on the principles of Sharia/Islamic law and guided by Islamic economics.
Despite having a guaranteed job, Mr Lagat, who says he likes to take risks and experiment, decided to quit.
"I didn't leave for greener pastures, but even if I had, I was bored with the routine. I felt so comfortable and had the urge to try something new.
"That's when I decided to venture into the unknown. I tried my hand at the renewable energy business for two years, which was an interesting experience.
"It is quite demanding; it involves a lot of travelling and that became a challenge because I have a young family. I recently welcomed my third child," he laughs.
Mr Lagat quit when the idea for the start-up came up.
"We were lucky to have a board of directors who helped us raise the initial capital of $2 million (Sh256 million) to get the company off the ground.
"The second phase was expansion, we recently opened in Mombasa and planning to open in other cities. The third phase will be regional expansion, starting with Kigali, Rwanda.
"There are already plans to raise funds for the third phase, which could be through venture capital and angel investors,” he explainsGoes on Mr Lagat.
Another reason for leaving the renewable energy business to help set up Buy Simu Technologies, was the marketing research and mapping proposal that the investor presented to him.
By help of data, the team had observed that while there was a huge demand for high-end electronics, particularly Apple and Samsung products, the majority of Kenyans were struggling to own them due to the high prices of the devices.
"We identified this as a problem and by coming up with a financing solution, we saw this as an opportunity to build a business that was yet to be tapped," explains Mr Lagat.
According to new data from international mobile operator association GSMA, the number of Kenyans citing the high cost of smart electronics as the main barrier to owning the devices rose to 51 per cent and 52 per cent in urban and rural areas respectively last year.
Although the company is yet to turn a profit still in its infancy-clocking a year since its launch, Mr Lagat says the business has already exceeded expectations.
"The business has been quite difficult, but the most interesting thing for us is that we have actually managed to exceed our expectations.
"The growth we have seen over the last year has been much faster than we had anticipated. We had hoped to sell 1,000 units within a year, but we have managed to triple that number.”
But why deal with only two brands?
"The whole idea behind Buy Simu is based on the perception that Kenyans have of Apple and Samsung products.
For a long time, these products, have been seen as premium and unattainable to the majority of Kenyans because of the prices, yet they are in demand.
So, we came up with a product that would facilitate this and make it accessible to every Kenyan who wants to own these high-end gadgets," he continues.
So how does it work?
To use the facility, all you need is your national identity card, a down payment and Mpesa statements for the last three months, which are used to assess the customer's affordability and tailor a product for them to ensure easy payment.
"You have to make a down payment on the product you choose, then we structure it so that you are able to pay in manageable instalments," he says.
The deposit is 40 per cent of the value of the product, with the instalments payable between one and six months.
Although there are other products with comparable pricing to those for which Buy Simu Technologies provides financing solutions, the catch for Mr Lagat and his partner was the technology behind the two products.
"What really got us into this business was the technology behind these two competing products. Especially for Apple, what makes it ideal is its robust security feature compared to the devices that run on the Android operating system. It's very difficult to tamper with iPhone security feature.
"For Samsung, we have partnered with Trustonic, one of the world's leading providers of mobile phone security, to provide a watertight locking solution. This now ensures that the devices we finance remain under our control until a customer has fully paid," he explains.
In the event that a client fails to repay on time, the devices are automatically blocked.
"We enter into a contract with a customer in good faith, but in an unfortunate situation, we will lock the gadget so that you can't use it. It will also display a message on the screen saying "return phone to owner," Mr Lagat laughs.
But he points out that this is a last resort. "We will try to reach you by phone, text and email, and if you are completely unresponsive after two weeks, what other choice do we have?"
Mr Lagat says the worst sales experience the startup has had is malicious damage.
"We have had customers who, after defaulting on the loan, dismantle the phone and sell it as a pair of parts, and we also know that these premium devices are expensive to replace. In such situations, we seek legal redress."
To drive sales, Mr Lagat says one of their effective strategies has been to offer insurance on the products.
"We try to be competitive with our pricing. But we also offer additional services like insurance. We insure all of our products against any physical damage, whether it be spillage or breakage," he says.
He adds: " This has been a big boost for us in terms of sales and an added benefit for customers. For example, replacing a screen on an iPhone 12 will cost you around Sh40,000 but with the insurance cover on our products, you will only have to pay Sh4,000 for the same services with the insurer covering the difference."
