Name: Lawrence S Munyika
Company: SafeCredit PL
Years in business: 8 Months
Business location: 301-2 3rd Floor Construction House, Harare
Number of employees: 3
Services: Enterprise Loans & Payroll Loans
Business Phone number: (04) 748130, +263 774 363 479
StartupBiz Zimbabwe: Tell us your name, tell us about your business and where you are operating from
Mr Munyika: My name is Lawrence Simbarashe Munyika and I am a microfinance practitioner. I am the founder and CEO of SafeCredit (Private) limited. The company is situated at construction house office 301 and 302 on the third floor.
StartupBiz Zimbabwe: What led you to start your own business?
Mr Munyika: The realisation that I had been putting my efforts into other people’s visions and making them come true with no particular attention to my own
StartupBiz Zimbabwe: How did you get started in this business? How did you raise the start up capital?
Mr Munyika: I am a former banker and the inward desire to promote financial inclusion fertilised my idea to start my own microfinance company. I had worked for three other microfinance companies before. I prepared all the necessary paperwork for the RBZ and recruited board members. The start up capital was raised from the current board. This is a team of like minded individuals who share the same vision as myself. After a proper presentation of how the business will also reward them for their contribution to the business they were game to join hands
StartupBiz Zimbabwe: What are some of the challenges you face in your business?
Mr Munyika: The major challenge for any business in Zimbabwe right now is adequate capital. For credit institutions it is normally reflected in the rates we end up charging. Second is the risk of dealing with outright fraudsters in the industry. The risk of default is also high in the industry due to the prevailing economic situation in the country. Sudden changes in government policy also affects operations. Due to the ever-changing environment of business operations, businesses have to innovate to remain sustainable. For us this means formulation of new products to suit the market and this normally mean a research and development budget. This is tied to the first point on adequate capital. So most companies end up forcing a product on the customers and this is normally a recipe for default.
StartupBiz Zimbabwe: What are the other ways of dealing with those challenges?
Mr Munyika: Capital can be raised through equity financing. Look for like minded partners and offer them a stake in the business through offering shares. Debt is also another way to raise required capital but a good track record needs to be in place and requisite collateral. Good corporate governance should also be part of the company’s culture to qualify for debt.
Development partners such as NGOs assist with funding especially if you have products targeting groups where they have intervention programmes such value chain financing in agriculture.
Microfinance is a business of relationships. Financiers have to familiarise themselves with the clients business and and ensure they are funding existing business. Use of credit reference bureaus also reduces fraud in the business. Proper business assessments reduces the risk of default. This ensures the business is adequately funded, not under or over funded.
Spreading your portfolio over several industries reduces the risk of Operations being affected by sudden policy changes by government. The hope is that the changes might significantly affect one or two sectors not all of them. It is always important to develop products suited for your target market always before commencing operations. However to take care of changes in the economy it is always important to have a research and development budget.
StartupBiz Zimbabwe: How supportive is the government to small businesses? What should the government do more of to support small businesses?
Mr Munyika: Government has now realised that the economy has all but informalised. There will be an sme fund that will be roled out to fund small businesses. However the size of such facilities always leaves a lot to be desired. It is important for government to support small businesses as they have become the backbone of the economy.
There is also need to ensure enabling investor conditions such that those who areable to secure their own foreign investors do not lose out.
StartupBiz Zimbabwe: How do you market your business?
Mr Munyika: Marketing is mainly conducted via distribution of fliers in areas of interest. Our target market is not always literate so this gives us an opportunity to interact and explain our product to them. We also carry out briefings to groupings organized by relevant associations representing our target markets.
Newspaper adverts also form part of our marketing as SafeCredit. As and when our market will become digitally aware we will use social media platforms and the web.
StartupBiz Zimbabwe: What role/impact does technology have in your business?
Mr Munyika: Technology forms an integral part of our business especially on the office operations side. In order to run a successful business management information systems should be the core of the business.
The system we operate allows us to be able to produce the requisite reports required by the Reserve Bank. It also allows us to operate in the field and not entirely base operations in the office.
StartupBiz Zimbabwe: How do you deal with competition in your business?
Mr Munyika: The beauty of our industry is that it is still in its infancy. We are actually failing to cope with the rising demand in the industry due to capitalisation challenges. However in order to gain market share in this industry it is very important to offer reasonable interest rates, offer products that resonate with clients requirements and good customer care.
StartupBiz Zimbabwe: What advice would you give to other Zimbabweans who would like to start a Microfinance business?
Mr Munyika: Microfinance in Zimbabwe is a business like any other business, but passion about this business is what is most important as it is a very involving business. There is always joy when you assist people and they achieve their goals or improve their livelihoods as a result of your intervention.
StartupBiz Zimbabwe: What advice would you give to the millions of Zimbabweans who are complaining about the hard economic conditions in the country?
Mr Munyika: There is a niche market for all and sundry who are willing to give business ideas a try. It is not all gloom and doom in Zimbabwe but people have to be innovative. A very simple example is of a vendor selling drinking water in the streets. He is able to generate a profit of 3 dollars after selling 12 bottles of water. To me that is serious business. So we have to innovate or we die.
StartupBiz Zimbabwe: Where do you see your business in 5 years time?
Mr Munyika: I am working toward transforming the institution into a microfinance bank in the next five years. This will enable us to pool resources from the people we provide credit to and be able to offer them more affordable products.
StartupBiz Zimbabwe: What is your advice to Zimbabweans in the disapora?
Mr Munyika: Zimbabwe is fast coming out of the economic crisis we once found ourselves in, I urge those in the diaspora to come and take advantage of the opportunities prevailing in Zimbabwe right now. The costs of entry are still very low and with proper risk mitigation strategies, any investment in Zimbabwe is a worthwhile investment.
StartupBiz Zimbabwe: Tell us more about your company, the services/products you offer, and how can our readers get in touch with you if they want your services
Mr Munyika: My company is a registered Microfinance Institution under the Reserve Bank of Zimbabwe. I offer two broad products which are payroll loans and enterprise loans. As their name suggests, payroll loans are for the employed who need money to augment their salaries or to cater for emergencies.
Under the enterprise loans, I offer working capital loans to individuals already in business who would otherwise not qualify for bank loans. These are you flea market operators, vendors, shop owners etc. I have also just designed and have deployed an agricultural product which is targeting quail producers.
For our terms and conditions I advise any interested to visit our offices at Construction House. We are in office 301 3rd Floor.
StartupBiz Zimbabwe: What are your last words to our readers, and advice to all entrepreneurs in Zimbabwe?
Mr Munyika: Innovation is the best way to operate sustainably in Zimbabwe. Let’s learn to form strategic relationships that enhance our businesses. Gone are the days when we used to hide our ideas from others and the competition fearing we would lose out. Let’s form partnerships that take the Zimbabwean economy to another level.
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