The least of all expectations from bride price negotiations would be the birth of a great financial business. But this is exactly how entrepreneur Daniel Githua founded his multi million business. Here is his story, which was first published in the Business Daily.
“When Daniel Githua took a friend to a bride price ceremony in August 2009, the tough negotiations that ensued would set him on a path to forming a company that is today worth Sh. 400 million. Despite hard bargaining over the bride price, the groom’s entourage fell short of Sh. 120,000. The funding gap gave Mr Githua the idea of bailing out his friend and at the same time making a profit.
“I quickly raised money from a few friends who were there and loaned it to my friend on condition that he pays back with some interest in a few weeks,” he nostalgically remembers.
Further analysis revealed that there was an opportunity for emergency lending and he decided to try his luck in the area. This sowed the seed for Speed Capital, a company that was registered in September 2009 using Sh. 120,000 as capital.
Together with Ben Ireri, a friend from his days at Starehe Boys Centre, the two began loaning small sums of money mostly to friends and associates. By the end of the year they had issued Sh. 5 million worth of loans. The company was a side-hustle since Mr Githua was working as an auditor at Industrial Promotion Services.
The company grew rapidly between 2010 and 2011 so the two partners began putting in place structures needed to support the business.
In April 2010, they hired their first branch manager, Miriam Mutinda, a banker who came from World Vision’s microfinance arm.
“We put in place proper processes and hired eight employees, mostly loan officers,” said Mr Githua. In the same year, Speed Capital raised Sh15 million from a group of investors, including Kenyans in the diaspora.
The first branch was opened in Murang’a, a decision driven in part by Mr Githua’s knowledge of the town as a result of having grown up there. But the office was closed down a year later due to low business.
The firm later set up offices in Kitengela and Naivasha. To make administration easier the company decided to halt branch expansion and concentrate in Nairobi and satellite towns. The next branches were opened in Ongata Rongai, Embakasi, Thika and Gikomba market in Nairobi.
In 2012, Mr Githua, who was now working at Tuskys Supermarket as a senior auditor, decided to stop moonlighting and concentrate on running Speed Capital on a full time basis.
The decision came with a personal price for Mr Githua; he had to take a salary cut until the business grew to a point where it could afford to pay him better – which was realised six months later.
By 2015, Speed Capital’s workforce had increased to 90 with more branches in the pipeline. The firm’s managers also planned to raise up to Sh. 2 billion.
In May 2015, Daniel Githua was appointed the CEO of Tuskys Supermarket. His tenure hit the headlines as infighting at Tuskys took a toll on the retailer. One of these was an incident in 2016 in which Githua was forcibly removed from office in a dramatic scene that saw siblings of the directors storm the office to escort him out.
A video captured at the scene showed people entering Mr Githua’s office and asking him to leave. He listened to their tirades in silence, though anger was evident on his face, before he later walked out followed by several people, some of whom were heard still shouting at him.
The group’s move followed his reluctance to adhere to a letter terminating his employment on January 23 2016 due to alleged conflict of interest, lack of respect, arrogance and poor performance of the company.
“We the directors of Tusker Mattresses Ltd have terminated your services as the CEO of our company with immediate effect due to reasons cited,” said the letter that was signed by the four directors of the company.
Githua was the first non-family CEO appointed by the firm in 25 years. He succeeded George Kamau, moving from his job as the CEO of Speed Capital. His appointment was seen as a remedy that could quell the drama that had in the recent past stalked the family-owned business. An estimated Sh.1.64 billion was alleged to have been siphoned from Tuskys’ accounts in 2012.
At the time of Githua’s appointment, Mr Yusuf Mugweru Kamau, the fourth-born in the Kamau family, opposed the decision, saying the shareholders had not met to discuss the hiring. Tuskys is run by seven siblings: Mr Stephen Mukuha, Mr Mugweru, Mr John Kago, Mr George Gashwe (former managing director), Mr Sam Gatei, Ms Mary Njoki and Mr Kenneth Mwangi Njeri.
One year into Mr Githua’s tenure as CEO, the directors noticed a drop in the company’s performance compared with previous years. “You are an 80 per cent owner of Artemis Africa Ltd and Martin Mureithi owns the remaining 20 per cent. Artemis Africa happens to be Tusker Mattresses Ltd’s employee outsourcing company,” said the letter of termination issued to Mr Githua. The directors also claimed that Mr Githua disrespected them and showed similar contempt for employees and suppliers of the company.