Building a National bank from Abossey Okai- the story of Kwasi Kyere.
In the heart of Ghana’s foremost automobile spare parts trading hub-Abossey Okai is the man who has braced all odds to build one of the fastest growing microfinance companies in the wake of controversies surrounding the Microfinance sector in the country presently. From a staff strength of two and a startup capital of Ghc 20,000.00, Kwasi Kyere has built one of the most successful finance houses in Abossey Okai to serve mainly the informal sector in that part of Ghana who for a better part of their operations have been neglected by the traditional banks. Now with staff strength of over ten employees and several other agents, Alliance Microfinance Company Limited is aiming to become a fully-fledged commercial bank in the near future. “The vision is big, our vision is to become a commercial bank in the next decade”, Kwasi Kyere told me in an interview. For a chartered accountant who left a good paying job in auditing among others, he attributes his success to his drive and determination to succeed and the knack for “growing businesses” as he will say most often in this interview. He asserts, “I have never aimed at applying for a job, even after school where the offers came in, I preferred doing my own business.”
Ghana Talks Business’ Paa Swanzy-Essuman caught up with the highly motivated business owner/manager in his plush office at the second floor of the Alliance Building in Abossey Okai. The conversation centered around; building and running successful businesses, his take to what lessons he has learnt from failures and also what keeps him moving in the midst of economic challenges which he alludes has caused several of his business colleagues to fold up.
Key : Paa Swanzy-Essuman=GTB, Mr. Kwasi Kyere=MKK
GTB: To what do you attribute your success? What are the top 3 key elements for starting and running a successful business like yours?
MKK: It’s tough to come up with three but I will say, first and foremost as a devoted Christian, you need to commit everything to God when starting any business. But sheer determination, boldness and focus are my three picks. Starting a business in Ghana is tough, a lot of things come to play, you need capital, you need a whole lot and it’s very difficult to come up with these things. I think you need an understanding of your business also, that’s where a business plan to guide you comes to play. Study the market and get some experience in the market you are entering. The dynamics of the business is very important. The next important step is implementation; how you put your plan to action to actualize the vision. Starting this business, I must say wasn’t easy. I started with nothing but I understood the business because of my prior experience in the financial sector. Did feasibility study to understand the nature of the market, I needed money but where was the capital coming from? I went for a loan, and used it to start this business. The seed capital was Ghc 20,000.00 and we hit the ground running. Based on the plan I saw that we needed two staff to start with because we could pay only two staff for a period of time before we bring in more staff as we grow.
GTB: What have been some of your failures, and what have you learned from them?
MKK: I have learnt a lot in terms of failures. And I am still learning. As we grow as a business, we face many challenges, and we learn from these challenges. And I have learnt a lot on the work too. In terms of dealing with people and putting systems and structures in place. For example, when we started, people would come and table nice proposals, friends and families and as somebody you know without having the right systems in place people took facilities and were not able to pay and that affected the business a lot. Now going forward, we have put systems in place to curtail these challenges which threatens the growth of the business. These challenges arose because at first I was the only person they spoke to but after all these I learnt that the right systems in place will curtail all these. Now you don’t need to see me, no matter who you are, you need to go through the system. This was after engaging the services of a consultant to help put the systems in place. I don’t need to be around for the business to go on and grow. The right systems check these challenges. Starting out we didn’t have any mentor to guide us, if we had I believe we’ll be way ahead of the business.
GTB: In the midst of challenges and uncertainties in the local economy, what motivates you to stay in business?
MKK: First and foremost I will give glory to God, it’s not my wisdom or quality of staff- it’s God. Also, the determination to ensure that we achieve our set vision was high. A lot of good business people and managers who have more capital and experience than me have all folded up but the determination to succeed has kept us in business. The staff has also been very effective and supportive, the systems we have structured are also helping and finally the credibility we’ve shown to customers has also helped. The number of Microfinance companies that have closed around us is overwhelming and I think the issue of credibility has helped us a lot.
GTB: If you had the chance to start your business over again, what would you do differently?
MKK: Given the chance, what I will do differently is I will start all over again by putting the right systems and structures in place. The main challenge of our work is systems. The Chief Executive Officer cannot just decide to take any funds when he needs it, even in this company I don’t keep cheque books. I need to write a memo and justify why I need those funds, we have an accounts department which keeps all cheque books. There is a process one needs to follow to ensure the system never breaks down. In the beginning, before we reached this point, we went through a lot of staff challenges; I need some level of staff to support the plan because without that you’ll fail. Thirdly, our customers, without them we are out of business. At first I was the only point of call and customers’ needs were dealing but with the right systems in place we handled that.
GTB: What advice do you have for anyone who wants to start his own business?
MKK: First of all put God first. Deuteronomy 8:18 “Thou shall remember thy God, for it is He that giveth the power to make wealth.” So start everything you need God first, without Him you are going nowhere. The second advice is for the person to be determined, sheer determination will help you move on in the midst of challenges. Also, the ability to take risk. From school, three of us all friends decided that we were not going to write letters looking for work but we’ll create our own. We sat down to think through what we can do. We didn’t have capital; we didn’t have the connections and experience. We finally settled on printing. We saw that businesses had the printing machines but didn’t have business. It was around 1996-7 and we went out looking for business not the letterheads, complimentary cards and posters but high level printing like branding for businesses like Shell, Ideal milk etc. How do we put down in the proposal to get the business? Formalizing the business was a good step for our business; we studied the market and went out to do pitching and presentations to several companies. The idea to make a move with your ideas. It shouldn’t be on paper alone. The printing of labels for oil marketing companies was done outside and bringing them here encountered several challenges so we approached these companies with prototypes and samples of what we can do. We did several presentations but eventually one company called us and the manager at the time said he’ll give us an opportunity to prove our worth. At the time (1996-7) we won our first contract of a sum of 60million old Ghana cedis (Ghc 6000.00), we approached a printing firm and showed them the contract, and produced these labels which the oil marketing company was expecting in one month’s time. We were able to achieve that in two weeks through sleepless nights and working around the clock to achieve our target. And then the manager was impressed and kept the contract trickling in. We made a lot of money but by not having any mentor to advice and guide us we never did any major investments. I will advice the young ones coming up to have mentors. We even didn’t have an office, we were moving from one internet cafe to the other. We were lucky no business manager asked of our office. I mentored a young guy who is now into printing from the business plan through to winning contracts and acquiring an office and staffing. Mentorship is very necessary.
GTB: What would you say are the top 3 skills needed to be a successful entrepreneur?
MKK: You should be able to take risk, that’s very prime. You also need to have a general understanding of the business. Your ability to plan and make projections is very vital. Your customers must understand you, you should understand them. Customer relationship is very crucial to any business’ success. People came to me and I was treating them nicely and being patient and addressing their needs. Also ensure that you’ll design products that will serve them better. Here for instance, we saw that they do business daily and in terms of paying back loans, paying monthly was a challenge to some so we designed products to meet daily, weekly and monthly payments to suit the individual customer.
Takeaways
• Be determined
• Have a plan
• Get some coaching (mentor)
Author: Paa Swanzy-Essuman || p.swanzy@ghanatalksbusiness.com
