Mr Joseph Humbe
Many business persons in Marsabit county attribute their success to Equatorial debts solution Ltd, a company that provides short term loans for its customers.Equatorial Debts Solution Limited, whose slogan is ‘For quick financial solution’ is located at Kaisut building, first floor room number one.

Unlike other conventional banking institutions, its loans  are based on trust  and not security. The company provides,chap chap loan i.e short-term lending, Business Asset Finance and Local Purchase Order (LPO) finance. Marsabit Times met Joseph Humbe Gubo, one of the founding members of this micro-finance company, and this was our conversation.

MTimes: What is the history of Equatorial Debts Solution Ltd?

This company was registered on 20th January 2010 as a limited company. initially, we started with two operational areas that is debt recovery and micro lending. We begun with around 48 customers but currently have more than 463 customers. So we have created a good customer base over the years.

MTimes: Tell us how the whole thing works.

Firstly,, in case a customer transacts with others and recovering debt becomes a burden to them, we step in to help. They give us the details of the debt and we recover it. Once this is done, we charge 10% more of what we recovered. Secondly, we are involved in chap chap loans ie short-term lending. In this, our potential customers are those who need money for expansion. We also hold trainings for; Small Business Management, Record Keeping, Personal Development, Stess and Health Management, Group Dynamics and Customer Relation management.

MTimes: Other lenders like banks, demand for collateral securities like land during loan application. So, what requirements should a customer have for Equatorial to provide a loan?

The customer must be 18 years and above, with a National identity card and running a legal business with license from the County government of Marsabit indicating that the business belongs to him or her. The Business should also be in existence for more than 6 months because if you start a business today and borrow tomorrow, chances for its survival are minimal.Loans are for business expansion and not for starting.


MTimes: Where did this idea originate? How did you notice this business gap?
Having worked in the banking industry for 13 years, I have a wealth of experience which I brought on board. Over the years, I realized that many need loans but the collateral securities demanded by the banks hinder them.

So, we saw the gap, to come up with system where customers can easily get loans without the need of log books or land as security.

Mtimes: What interest rates do you charge on the micro-loans?

Firstly, There is an application fee with flat rate of sh.100 for any amount you want to apply for. Then, we Charge 7% for a three month period for any amount.

Mtimes: What are some of the drawbacks since you started?

Few cases of someone borrowing and recovering the loan becoming a burden forcing us to follow up. In addition, in case a customer passes away ,it becomes difficult to recover the money, instead we just write it off.

Mtimes: How can you know the credit worthiness of a customer?

We visit the existing business frequently and evaluate the progress. Just from the look of things you can tell whether the person can recover the loan or not. Most of them are people who are known to us, so we know who is who.

Mtimes: How important is Equatorial Debts solution in solving people’s problems?

Our slogan is ‘for quick financial solutions’ we make products tailor made to suit the customers. Other lenders like banks have prolonged bureaucracies and need your collateral securities for loan application. For us, we lend money any time the customer needs. Borrow today and get today. This means we help them solve their problems quickly with minimal requirements.

Mtimes: This kind of business needs availability of money for frequent in-let and outlet. How do you ensure this?
At first, all the directors contributed some amount, the Equity bank also lent us 1M which we used as the initial capital but for now, we solely depend on ourselves and help others.
Mtimes: What changes will be evident in this company in the near future?
From August this year, we would like to introduce the component of insurance known as Loan Risk Management Fund. It will be charging at the rate of 1.2% of all the amount of loan you borrow. Therefore, we will be able to protect our selves as well as help the customers.
In the same month, we would change our game plan from weekly short term lending to monthly, hence giving the customers enough time.

After five years, we expect to be registered with Central Bank as a micro finance firm. They need sh.20M deposit as a requirement for  registration. We will also open a branch in Moyale.

Mtimes; What method do you use to advertise and create awareness about the existence of this company?

Recently, we produced 1000 calendars advertising our company, this really brought many customers. we also use direct marketing by use of T-Shirts and caps with information about us.

Mtimes; What measures have you put in place to ensure all customers recover their loans fully?
In our regulation, in case you default, first and foremost we summon both the borrower and the guarantor and try to reason with them. If there is a negative feedback, we take a step to take the matter to the court of law.

However, in terms of loan recovery, the customers have been faithful because in 2014 there was 100% recovery without single stream left out, while in 2015 we had 99% recovery.

Mtimes; What advice do you have for someone who wants to start such kind of business?

Since money is always on demand, this is a good business. But the person must know the need and his/her target for a strong foundation.

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