The entrepreneur who sold her house to build a fintech business

Chilufya Mutale

Interview with Chilufya Mutale
CO-FOUNDER, eSHANDI

Lives in: Lusaka, Zambia

Chilufya Mutale is in the business of lending money to underserviced people in Zambia and beyond. As the co-founder of eShandi, a Lusaka-based company formerly known as Premier Credit, she has overseen the disbursement of over $11 million in loans since 2019. Starting as a small operation in Zambia, eShandi has expanded into Zimbabwe, Kenya, and South Africa, while diversifying its offerings to include payment solutions and value-added services like life insurance.

Mutale spoke to How we made it in Africa editor-in-chief Jaco Maritz about how she built the company.

Topics discussed during the interview include:

• The opportunity she identified to create a new kind of money-lending business
• The fear and uncertainty she faced when starting the company
• How she and her husband risked everything – their savings, their house, and their cars – to launch the venture
• Finding their first customers among market vendors in Zambia’s mining towns
• How they ensured the money they lent out was paid back
• eShandi’s growth from a brick-and-mortar operation to a digital platform
• Their reasons for entering Zimbabwe, Kenya, and South Africa
• Why she admires Canva founder Melanie Perkins
• What she would do differently if starting the company again
• Untapped business opportunities she sees in Zambia

Watch the full interview below:

Interview summary

Zambian entrepreneur Chilufya Mutale and her husband-turned-business-partner risked everything to launch their lending company, Premier Credit, which has since been rebranded as eShandi. The couple poured all their savings into the venture. They also sold their house and their cars. “We were basically using public transport … We just went all in … It was a very, very risky thing that we did, honestly,” she recalls.

Mutale recognised an opportunity to provide loans to small businesses and low-income consumers, many of whom were excluded from traditional financial services.

To minimise costs, the couple decided to move from Lusaka, Zambia’s capital, to a smaller city. They settled on Kitwe, a mining town with significant economic activity.

The next step was finding customers to lend money to. They strategically opened a small branch near the largest market in Kitwe, home to vendors selling everything from fresh produce to consumer goods. Their initial focus was on providing small loans, as low as $5, to these traders.

The couple worked closely with market leaders, who managed the vendors and understood their operations. Because vendors paid levies to the market association, the leaders had insights into which traders were established, consistent in paying their levies, and likely to repay loans. In return for their cooperation, eShandi offered the market leaders interest-free loans.

“We worked with them to help us identify the customers who we could work with. And then they created a platform for us where they gathered all the members together. And then we then basically pitched to them by talking about our products, our service offerings and what we can offer them,” Mutale explains.

At the time, eShandi was a tiny operation – just Mutale, her husband, and two loan officers. Demand for loans was high, and their initial offering was a 30-day product with flexible repayment options, including daily, weekly, or lump-sum payments at the end of the term.

To attract more clients cost-effectively, the company introduced a referral incentive. Existing customers who referred new clients enjoyed reduced interest rates on their own loans.

The business grew organically as repayments, including interest, were reinvested into extending more loans.

From Kitwe, the company expanded to another mining town, Solwezi, replicating its model of providing loans to market traders. Today, the company operates four brick-and-mortar branches across Zambia.

Reaching millions through technology

With growing revenues, the company hired developers to create a technology platform that allowed customers to apply for loans digitally. This enabled the company to scale by removing the need for physical interactions with customers.

A major breakthrough came when it partnered with mobile network service providers, which white-labelled the platform for their millions of users. “We [were] then able to instantly provide financing to that wider, wider base.”

The company has since introduced a range of other financial services, including payment solutions and value-added offerings such as life insurance.

Expanding across borders

The company also pursued geographic expansion, with its first foray into Zimbabwe. Reflecting on this move, Mutale explains: “You’ll find that where a market may seem challenging, that’s where you have the greatest opportunity because the need for financing is much higher. And you’ll find that because there are challenges in accessing financing, this is where you have people who are more willing to repay on time because they want to maintain a good relationship with their financer so that they can continuously and easily access financial services. In markets that are very developed and people are spoiled with choice of where they can access financing, you’ll find that in such markets default rates are much higher because the customer can move from one financing institution to another.”

eShandi later expanded to South Africa and Kenya, much more developed markets. South Africa boasts a sophisticated financial services industry, while Kenya is home to established players like Equity Bank and the mobile money platform M-Pesa. However, Mutale points out that even in these countries, base-of-the-pyramid customers remain underserved. And while some customers may have access to specific financial services, they often lack an all-in-one platform that provides a full range of solutions.

She also highlights the interconnected nature of the regions where eShandi operates: “There are a lot of Zimbabweans who are working in South Africa who are always sending money back home. There are people from Zimbabwe who are sending money to Zambia, to Kenya, to South Africa. So there are a lot of synergies and opportunities around operating in the same ecosystem. If someone has an eShandi app in South Africa, they can use the same app in Zambia, Zimbabwe, Kenya, and then they can transact on one platform. So you don’t need to build up financial data even when you’re in a different market.”

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