The journey so far: Ivan Mbowa, CEO, Umati Capital

Ivan Mbowa

Ivan Mbowa is the co-founder and CEO of Umati Capital, a Kenyan-based financial institution that provides credit and related payment technologies to agri-business supply chains, retailer value chains and fast-moving consumer goods manufacturers.

1. Tell us about one of the toughest situations you’ve found yourself in as a business owner.

One of the toughest situations that I faced in the early days of our lending business was having to make a sudden provision for loss on 90% of our loan book after discovering systemic customer-driven fraud.

As you can imagine, this led to a catalytic shutdown of debt funding lines, equity investor interest and key staff departures.

I would like to tell you that I immediately knew what to do, but I would be lying. I spent weeks like a deer in  headlights, questioning everything. This was the proverbial lowest of lows. However, one of the things I learned was that it is precisely at times like this that you discover who you truly are in the face of a devastating crisis.

To overcome this situation, I began the slow journey of literally rebuilding the business by quickly admitting where we went wrong, putting in place the right controls and processes, painting a new vision for the future and (painfully) trying to convince my investors and remaining staff to give us a second chance.

Now almost three years later, we are out of the woods and have grown loan volumes six times with a fraction of the bad debt (and having almost completed the full recovery of the 90% of the loan book that we wrote off).

2. Which business achievement are you most proud of?

I am most proud that five years after having started and against the odds, our startup is thriving after having been tested through existential crises.

A friend once told me that in the early days, running a startup is a game of attrition: in a game where 90% of your competition won’t be alive within three years of starting, to survive is to win.

On a more conventional basis, I would also add that I am proud of being able to transform a concept into a business, raising significant capital, recruiting an amazing team and proving that you could create a digital lending business that would seek to provide small businesses with access to uncollateralised working capital that could change their business fortunes. This is in an economy where the majority of banks have failed to provide accessible finance to small businesses.

3. Describe your greatest weakness as an entrepreneur.

One of my greatest weaknesses is conversely one of my greatest strengths. This is the ability to apply a laser-like focus to getting things done against the face of criticism or lack of faith in those around me.

This, of course, sounds like a great strength until you realise that this has also led to being less than quick to adjust course in business when the situation called for radical change in an opposite direction. I have prevented this from negatively impacting my company by having greater self-awareness [and] the guiding hand of a board of directors who ultimately form both a sounding board and an approval layer around strategic direction.

4. Which popular entrepreneurial advice do you disagree with?

I disagree with the conventional business wisdom that it is better to copy well than [to] invent badly.

You see this in a lot of markets in Africa, where a successful business concept is instantly replicated and true innovation is occasionally looked down upon.

My personal philosophy (borrowed heavily from Daniel Pink’s book “Drive”) is that I am only driven by work that is challenging, purposeful and that allows me a chance at self-mastery. Spending the better part of my years replicating the work of others would be a waste of my intellect and life.

5. Is there anything you wish you knew about entrepreneurship before you got started?

I wish I had known some of the greatest challenges in entrepreneurship would come from within and not outside of myself. The battle is truly won or lost in your mind.

Entrepreneurs are the mad ones among us who leave certainty for a chance at the improbable. Life will continuously remind you that you are playing against the odds. The moment you give up mentally, it becomes a self-fulfilling prophecy.

Finally, as another friend told me at the beginning of my own entrepreneurial journey: there are two types of businesspeople in Africa – visionaries and hustlers. So choose your tribe and don’t waste your time trying to play by the rules of the other group.