From mitumba trader to top entrepreneur

Saturday May 5 2018

Lucy Kiongosi at her scrap metal yard in

Lucy Kiongosi at her scrap metal yard in Dodoma. Although she has several people working for her she’s actively involved in the day-to-day work at the collection yard. PHOTO | COURTESY 

By FAUSTIN MRISHO
More by this Author

Tanzania has for long been considered a sleeping economic giant of the region and Africa in general, lagging behind other less-endowed countries.

But the liberalisation of the economy in the 1990s ushered in a wave of optimism not just in government agencies, but also in the private sector where entrepreneurship took hold and private citizens exploited the changes to not only get a piece of the growing economic pie but also help bake it.

From Arusha to Dar es Salaam, Tanga to Mwanza, small to medium enterprises have been thriving since. One such success story is that of Lucy Kiongosi, a 35-year-old businesswoman from Dodoma, who was recently declared the Woman Microentrepreneur of the Year, 2017 at the Citi Microentrepreneurship Awards. She received $2,000 prize money.

Taking financial risks and determined to succeed, in four years Kiongosi grew from a struggling mitumba trader to a multimillion shilling investor, employing dozens of people.

In 2012, Kiongosi was newly divorced, a single parent of three and selling mitumba for a living. The income was insufficient and irregular and she was looking for something more profitable.

One morning, as she went about her business in Dar es Salaam, she happened to walk by what seemed like a busy scrap metal yard — at least from an outsider’s perspective. She got curious.

There was a long queue of truckloads of all sort of metal waste waiting to be offloaded. She got talking to the drivers and loaders who explained to her that they were suppliers of scrap metal to the yard owner. It did not occur to her that everyone around the scrap yard was male, she walked in and asked to speak to the proprietor.

The dealer explained to her the business and she asked for tips on how to be a supplier. After that little chat, Kiongosi decided to give the business a try.

Getting ideas

“I was encouraged by the long queue of suppliers at the yard. It meant either there was good money to be made or the prospects were good enough. I spoke some more to some suppliers. Luckily, they embraced me despite the fact that they were all men. They encouraged me to try out my luck,” Kiongosi recalls.

“In about a month, I had supplied a truckload of about 10 tonnes of scrap metal to a dealer in my hometown of Dodoma. At the time I did not have the means to transport it to Dar es Salaam. I was so excited when I got my first cheque that I doubled my efforts. With time, the volumes and frequency of my deliveries increased.”

By the next month, she had raised enough money to deliver the scrap in Dar es Salaam herself, where it fetched a better price. As it turned out, it was the beginning of her business journey.

“From my first delivery of 10 tonnes, I now deliver 40 tonnes of scrap to Dar es Salaam every month. I was lucky because the scrap collectors were readily available. All they needed was cash on delivery.”

When she realised she needed ready cash to pay for her expanding business and with little savings, Kiongosi approached BRAC Tanzania (an international microfinance organisation) for financial training and a loan to boost her business. She has so far taken six loans from BRAC Tanzania worth Tsh53 million ($26,500).

“I took my first loan of Tsh6 million in 2013,and repaid it in six months. I then took other loans of Tsh8 million, and four more of Tsh10 million each. I always clear each loan in six months. Proper planning has got me this far,” Kiongosi says.

Three months later, as Kiongosi’s business grew, she visited a poultry farm in the Dar es Salaam area of Mwenge, which manufactured chicken feed from animal bones.

The farm had one challenge: The bone supply was low. Kiongosi took up the challenge and decided to supply animal bones to the factory.

“Bones sell even better than scrap metal. When I approached the poultry farm manager, he gave me an order. In less than a month, I had delivered two tonnes of bones. I simply instructed my scrap collectors to get me the bones too. From the two tonnes I started with, I now supply 40 tonnes of bones to the factory every month,” says Kiongosi, now an employer.

Lucy Kiongosi's bones and metals business in

Lucy Kiongosi's bones and metals business in Dodoma and Dar es Salaam. PHOTO | COURTESY

Expansion

As her business thrived, she opened five field collection centres around Dodoma. With a staff of seven, two in her main shop and five in the field centres, she spends about Tsh2 million ($1,000) on salaries.

It costs her Tsh300,000 ($150) for the annual business permit from the Tanzania Revenue Authority. On average, she supplies 45 tonnes of scrap metal (three truckloads) and 40 tonnes of bones (four truckloads) to Dar es Salaam every month, making Tsh6 million ($3,000) from the bones and a little more than Tsh12 million ($6,000) from the scrap metal.

For each trip to Dar es Salaam she spends Tsh30,000 ($15) on transport licence.

She makes a monthly profit of Tsh18 million ($10,000) in a country whose per capita income is $879.

In an industry largely dominated by men and often portrayed locally as “a kingdom of the underworld,” because it is done by a network of a few people, Kiongosi has done well for herself.

Kiongosi has an ambitious plan of setting up her own iron smelting and processing factory on a three-acre piece of land she recently acquired in Dodoma for Tsh8 million ($4,000).

Her goal is to become the biggest player in the iron-steel industry in the region as Tanzania looks to becoming an industrialised country in the coming decade.

“I have already submitted my factory plans to the authorities. The paperwork is awaiting approval from the municipal government,” says an upbeat Kiongosi.

She also aims to be the largest supplier of poultry feed in Tanzania. “If all goes well, I’ll set up a poultry feed processing plant in Dar es Salaam.

My goal is to supply poultry feed across Tanzania and the region. Tanzania has access to both the wider East Africa and southern Africa market, and that’s big for business,” she adds.

Background

A primary school drop-out but blessed with entrepreneurial brains, Kiongosi paid her younger sister Angela Michael’s school fees and enrolled her for a degree course in Business Administration at the College of Business Education in Dodoma so that she would eventually help manage the business. She is now in her third year of studies.

Although she still considers herself a humble business person, Kiongosi lives in a Tsh70 million ($35,000) five-bedroom family home in Dodoma, drives a Tsh12 million ($6,000) car and owns two parcels of land in Dar es Salaam and Dodoma.

She also owns a block of rental flats valued at Tsh100 million ($50,000) in Dodoma, which supplement her income.

But life has not always been rosy for Kiongosi. When she separated from her husband in 2012, the responsibility of raising their three children — Sarafina, now 17, Michael, 13, and Noadia, 9 – was hers.

She moved into a single room and lived hand to mouth. Her life of struggle is what inspired her to go the extra mile and excel in business.

She says excelling was not a choice, it was the only way. She is grateful that she no longer has to answer to a landlord and that her children can finally attend good private schools.

“I encourage other women to take risks and be independent. Work for your income. If you are married, bring something to the table too to lift your family, don’t just sit back and wait to be provided for. Work and contribute towards your family’s future.”