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.
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.
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.
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.
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.
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.
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.
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.
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.