#09 Capital – Stories from the Pandemic

If there’s one thing that has haunted me in the past few weeks is not being able to pay attention to this blog. I’ve had good reasons to be away but obviously a better one to be here today. There’s so much drama in the salon (my current location) and rather than being fixated on their stories, I thought to turn my attention to some candid conversations I had late last year / early this year. Capital and the demand for it during the pandemic. I feel a little sad that I didn’t share these earlier, but I suspect that you’ll find the lessons herein to be timeless.

There’s this thing in our chama we call kugonganisha. You borrow cash today and must pay it back within 2 weeks. This way you don’t get charged any interest whatsoever during the grace period. Kugonganisha really came through when watu-wa-accounts were taking us round in circles whenever we asked wanalipa lini?. Family has been so kind. I’ve received loans without any repayment terms ‘lipa ile siku utaweza‘. _{Musili, 30s, Compliance Expert}

I needed 2M for a piece of land. I sold off some shares, withdrew cash from my money market account, got another chunk from the chama and since it was a family transaction, I was given the opportunity to pay the rest pole pole. _{Salama, 40s, SME Practitioner}

The pandemic made me turn to farming. I komboad 2 acres of land at 5k an acre. Planting happens twice a year and kulima na tractor costed 2k. Then there was another 2k bob for seeds, fertiliser and labour. So with just 15k, I was assured of getting 80-100k if my crop did well in the year. Mama would also eventually rest from working in people’s shambas. Food was coming to the table. _{Olamaiyan, 20s, Legal Intern}

I have needed a lot of capital, but it’s been difficult to come by. And when it gets here, it all goes out. I’ve had to change the type of chicken I breed. Kienyejis are better but it takes 6 months for them to mature. A 3-month growth cycle has bumped up my cashflows. _{Wamaitha, 40s, Farmer}

No we haven’t needed any sort of capital. _{Blessing & Amani, 40s}

I took advantage of the loans the UK government was offering. It was more of a strategic play. I could arbitrage because the interest rates were pretty low. I focused on crypto mining and only went back to work in April 2021. I also got to do a will. COVID made me a lot more conscious of the fragility of life. I wondered about my kids and how they’d manage if something went wrong. I now plan to setup a trust so that there’s a more sustainable vehicle that they can rely on. _{Joe, 40s, Architect by day, Business Analyst by night}

Things have not been going too well but I’ve been lucky. The SACCO disburses cash very easily. _{Sunday, 40s, Investment Analyst}

I haven’t really needed capital, but I’ve had investment ideas. I hope to pursue them in future; for now, I’m just trying to manage the moment. _{Zaire, 30s, Economist}

Kwa sasa hapana but form ni kusaka dough after covid. Biashara biashara hivi hivi. _{Kevo, 20, Aspiring Mechanical Engineer}

I didn’t need capital per se but I tried out a different business. I, however, fell ill and couldn’t focus on it. I opted to extend my current line of business. _{Seydou, 30s, Finance Student majoring in Digital IT & Entrepreneurship}

Upgraded the car. Paid part cash and part loan. A 7% asset finance loan. Purchased a 13% treasury bond. Yes, increasing our passive income is integral to our growth strategy. _{Muriithi, 40s, Wealth Advisor}

I haven’t needed money, but I was a little worried about hospital expenses. I haven’t had to go into hospital, so I am not sure what is covered by the insurance. Insurance is extremely expensive here. A full cover costs anything between USD 5,000 and 10,000. I normally go for a high deductible / out of pocket expense cover because it’s cheaper. And my parents (back home) will never be able to afford my bill if I fell sick. Plus, you can easily get bankrupted if you don’t have a medical cover. _{Victoria, 40s, Governance Risk and Compliance Expert}

I have not needed to visit the bank for a loan. I’m living on my savings. Actually, I have enough savings to carry me through to the next year and this is without touching my current year’s pay. I grew up in an environment where money was never there. One time we met a guy who was hawking pineapples and my mum said, ‘chukua ukule‘. I shrugged and told her ‘hakuna pesa‘. Apart from self-denial, I’ve discovered that I make better decisions when I have more money than with a smaller amount. Say if a house is going for 3M and I have 500k, I am discouraged but when I have cash closer to the amount, I can make the quick decision of buying it because I can afford it. I essentially save to generate enough to buy what I want. Another thing that works for me is saving in the bank. I know this kind of saving is discouraged but there’s a peace and comfort in knowing that I have a certain value in the bank as opposed to being asset rich but liquid poor. I don’t have a fixed income and therefore liquidity is important to me. I’m less open to financial vulnerabilities. _{Kigen, 30s, Data Specialist}

There has been a lot of free money circulating. Free money for those who don’t have an income. Free money for affected businesses and those still in business. Free money for parents and parent soothers. Businesses have borne the brunt of the pandemic and are especially desperate for personnel. Some employees are too scared to return to work, others are simply not ready for a new employment normal. I have a feeling we will eventually feel the effect of the free money in our taxes! _{Sophia, 40s, Due Diligence Analyst}

I haven’t needed any sort of capital. _{Jasmine, 30s, Policy and Advocacy Specialist}

I needed money for my medical expenses. I then needed money to move back home. I thought I’d save a little but it was all getting used up. I decided to move out. Took out a soft loan from the SACCO to help me with the shifting and other expenses. My salary is just not enough. _{Regina, 30s, Graphics Designer}

I have not needed money. We’re not trying to buy a house. We’re not making any big purchases. We’re not doing anything out of the ordinary. There’s been no need for big money. In US, however, everyone takes on debt, so I bought a new car this August (2021). A USD 34,000 Subaru Impreza Sedan. I wasn’t really going to buy it, but COVID has messed up with the supply chain systems. And guess what? Secondhand cars are now on the demand. I traded in my BMW 540i XDrive for USD 18,000; the dealer treated this as a down payment. The rest is being paid through a 5-year loan which I got interest free because I have a good credit score. Quite a deal, right? I mean it just doesn’t make sense to put an entire USD 34,000 into a depreciating asset. There are other things to channel your cash to. We can’t farm here but we can invest in real estate and in manufacturing and in stocks. Basically, I am the kind of guy who just saves. _{Austin, 50 this year, Vice President – Internal Audit}

I have needed capital for various projects but getting my mum on a medical cover was a top priority. _{Emmanuela, 40s, Development Specialist}

I have needed help with rent and food which fortunately has come from family. _{Nyamari, 30s, Techpreneur}

I needed cash to meet my mortgage payments because my tenants had also been adversely affected by COVID and were having challenges in meeting their rent obligations. _{Israel, 50s, Finance & Commercial Executive}

The pandemic presented me with some really good opportunities. My cousin and I saw some plots. We thought we could get them for a bargain and bargaining we did. The seller agreed to a 15,000 bob down payment. Yes, Kenya shillings fifteen thousand only. He also gave us 6 months to pay the balance of 785,000. The land, as you can imagine, has significantly appreciated in value. _{Roxie, 40s, Finance Expert}

I had quite a number of out-of-country assignments in March and April of 2020. My fee note payments, however, delayed by 3 months. This caused me quite some distress. I thought of disposing off some investments but the process of selling an asset can be too much. And for the first time in history, I called up my child’s headteacher to explain the situation; she agreed to a later payment. I also reached out to my landlord who was very gracious to me in those 3 months. _{Sankara, 40s, Accountant}

The idea at the start of this writing journey was to aggregate these stories into bit-sized lessons. Turn the learnings into a book but it just makes better sense to transcribe them as is. And so with permission (and pseudonyms), I share these subtle but powerful narratives because there are some things in life that can only be overcome by the word of testimony. Have a Blessed Sunday 🌻 🌻 🌻