How one sack of potatoes grew into vibrant businessMonday March 09 2020
In 1998 Irene Mwangi started peeling potatoes and delivering them to a food outlet in Nairobi. She never imagined the humble beginning in her business would grow into a thriving enterprise it is today
Ms Mwangi started with one sack of potatoes, buying the produce from farmers at the Marikiti market in Nairobi and supplying 10kg packs to food outlet, Wimpy’s in Nairobi. Steers and Chicken Inn would later join her roster of clients.
She says demand for her services grew as the number of outlets opening up to serve the rising consumption of chips and roast potatoes mainly among young people also increased.
Ms Mwangi’s enterprise was ready to scale in 2015 and she needed funds for expansion. She knocked on various doors for financial support and was introduced to GroFin, an impact-driven SME financier that invests in small and growing businesses in Africa and the Middle East. The firm has invested nearly $12.3 million (Sh1.23 billion) in women-owned businesses in Kenya.
GroFin funded Ms Mwangi’s business and with its technical partners, the Cherie Blaire Foundation and Dutch organisation PUM, it enhanced Ms Mwangi’s management skills and supported the business to develop a long-term growth strategy.
Mr Mwangi’s startup, Known as GAEA Foods, now processes potatoes supplied to a number of fast food chains, schools and various institutions. She has since managed to increase sales tremendously, while creating jobs — she now has 37 employees, out which 23 are female. More significantly, she has created a market for nearly 450 small scale farmers in the Rift Valley.
She also decomposes the potato peels to form organic fertiliser and animal feeds rich in proteins.
“My motivation has been the impact that our work has in the farmer communities we work with, the clients we serve, the people who make it all happen, and the realisation that this is my lifework. This is my small way of contributing to the larger picture,” Ms Wanjiru told Enterprise.
While her business has grown fast, it has not always been a smooth ride.
Getting capital to expand was her key hurdle.
“It was difficult. You go to a bank and they look at you like Kuchonga viazi (peeling potatoes) is for those who can’t pay their bills. You ask for Sh100,000 and they give you Sh50,000 to test the waters but… the money can’t do what you intended to do,” Ms Mwangi says.
Her challenge in getting credit was made difficult because she had no collateral, a problem that has been cited invariably as a major hindrance for women enterprises.
Rita Odero, Investment Executive at GroFin Kenya says that women face various challenges in getting funding usually limited by social and cultural barriers and miss out on opportunities to get the right financial partners.
Because they lack collateral, many women rely on social networks such as chamas, family and friends to raise capital. But this route is limited in terms of amounts that can be raised.
Another setback faced by women like Ms Mwangi is balancing between family and business
“Women’s access to markets are often limited by something so small as their inability to participate in networking events that take place outside working hours, as this is a time considered for family and children,” Ms Odero notes.
But it’s not just the money that is needed for a business to grow. Entrepreneurs require training on how to manage cashflow, tackle risks and develop ideas for growth.
''Whilst access to finance is a key constraint for many women-owned businesses, it is equally important that as financial institutions we further provide business support in enhancing women entrepreneurs business skills,” Ms Odero says.
Ms Mwangi says entry into the business by people who may not be taking quality and standards seriously is hurting the reputation of their enterprises.
“When we started it was a new space, now a lot of people have come in and maybe now we need restaurants to source from processors and not just someone peeling at the back of a garage without knowing what water they use, how they deal with the waste, or even how they treat their workers,” she says.