Cash is always in short supply for many university students and saving is the last thing on their minds. However, Moses Muriithi went against the grain and started saving to raise capital for a real estate business when he was a third-year student at Kenyatta University.
Mr Muriithi dreamt of going into business straight from campus and he was determined to raise capital at all costs. That he saved part of the Higher Education Loans Board (HELB) credit is a testimony to his burning desire to realise this ambition.
His target from the start was real estate business and immediately after stepping out of campus he set up his company known as Fanaka.
“While in the university I did online jobs such as data entry and website designs and get paid through PayPal. Whatever I earned I used to invest in land,” he says.
SAVED HELB LOANS
“By the time I started Fanaka in 2015 I already had several plots to start with. As a result of my small earnings together with some cash I had saved from HELB loans I had some Sh40,000 which I used as capital.”
He used part of this amount to acquire an online account which he used to source contracts from foreign organisations for IT-related tasks.
“Mostly I handled web designing and data entry where I could earn up to Sh100,000 a month,” he explains adding that after four years he had already accumulated five 50 by 100 plots valued up to Sh1.4 million.
His firm has now made great strides, handling a long list of customers. It focuses on low and average income earners who are looking to own land or house on the outskirts of Nairobi.
“Our projects mainly target people who under normal circumstances wouldn’t be considered wealthy. Our average price for land is Sh450,000,” he says.
“Most of the pieces of land we sell range from an eighth to a quarter of an acre.”
The company, which operates in Ruai area of Nairobi, has already completed six projects in the past 12 months.
“Already we’ve completed two projects in Kamulu and Joska, one in Ruiru East, another one in Kamakis, Ruiru and one in Malaa,” he reveals.
In two years the enterprise has grown rapidly, recording a Sh80 million turnover last year.
“Our profit margins are low but we strive to make a lot of sales to earn more,” he says.
He has eight people employees who are on permanent terms.
To attract customers, the firm ensures that the pieces of land it sells are in good locations with necessary amenities such as water, electricity and all weather roads.
“This makes it possible for clients to develop them. That these plots are not far from the city is also our high selling point,” Mr Muriithi says.
The firm also ensures it conducts due diligence on all transactions to ward off fraud. The integrity of the deals, he says, has given his firm an edge in a sector swamped by con artists swindling unsuspecting victims.
LOW INCOME EARNERS
“We ensure the plots have ready titles to facilitate the client’s in doing the search at the lands offices before they commit themselves. We also make sure the plots are affordable to even low income earners, with some of our plots going for as low as Sh300,000,” he says.
The entrepreneur credits his success to their flexible modes of payment where a client can pay 30 per cent deposit and the balance paid in one year. The firm is also tapping on social media, property sites and their website, fanaka.co.ke as marketing and advertising tools.
But as any business, Mr Muriith’s venture is not short of challenges, the key of which is getting enough funds for expansion.
“Also land brokers who at times exaggerate land prices have proven to be a thorn in the flesh, but with time we have managed to deal with them,” he says.
His advice to those new business is to ensure integrity and transparency reigns adding that clients keep referring other people because of the trust created.
“They also need to be patient. It took me about 4 months in business to sell the first plot,” he adds as he challenges his fellow youth to create job opportunities instead of waiting to be employed.