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The rise and rise of James Mwangi

Craig Rix | July 24, 2012 - 8.55UTC

From humble beginnings to World Entrepreneur, the story of equity banker James Mwangi
reveals the underlying truths of any successful business (large or small)
Salle des Etoiles, Monte Carlo, Monaco playground of the worlds rich and glamorous. The
tiny state of Monaco, tucked between the Alps and the Mediterranean, has the worlds largest
collection of millionaires and billionaires per square foot. It is home to some of the best known
film, music and sports stars, while the annual Monaco Grand Prix is considered the glittering
apex of the motor racing calendar.
For the last 12 years, another annual event has sent pulses racing in this city state where the
average per capita income is over 180,000 euros. The Ernst & Young World Entrepreneur of the
Year Award is the world championship of entrepreneurial talent.
This year, 59 business champions, all winners of the Ernst & Young Entrepreneur of the Year
Award in their own countries or regions, gathered at the fabulous Salle des Etoiles to witness the
crowning of the champion of champions, the World Entrepreneur of the Year.
The stakes were high. Who would win the worlds most coveted business award? Names were
bandied about. But as the envelope was opened, a pin-drop silence descended. The winner is Dr
James Mwangi of Equity Bank, Kenya!
For a few seconds, the hush continued, then the assembly broke into loud cheering and James
Mwangi was given a standing ovation as he went up to collect the most prestigious award for
enterprise the globe has to offer.

This was an astounding victory, not only for Mwangi, or Kenya; not only for the banking sector,
or Africa, but for all black entrepreneurs everywhere. It marked a first in every category.
It also marked the apex of an extraordinary journey that began 50 years ago in a small village on
the slopes of the Aberdares in central Kenya a universe away from the glitter, wealth and
glamour of Monaco.
Foundations of success
The Aberdares and Mt Kenya considered by many as the spiritual heart of Kenya was also
where Kenyas pre-independence freedom fighters, the Mau Mau, were locked in battle with
colonial armies.
My father fell victim to the struggle, James Mwangi told me when I interviewed him in
London shortly after he had received his award. Mwangi is the sixth of seven children. My
widowed mother had to find ways and means to feed and raise us in a deeply rural setting.
There was no time for childish games everyone had to pitch in to keep the home fires burning.
Mwangi, like the rest of his siblings, had to do his share of chores tending to livestock, making
charcoal, selling fruits and other produce for small margins.
Although the family was poor, my mother ensured that we were disciplined and she laid out a
set of values which became anchors in our lives, Mwangi recalled. There was one point on
which she was not prepared to back down or compromise one iota education. Her children, all
her children, would be educated no matter what it took.
As Mwangi talked, a picture of his mother, Grace Wairimu, began to emerge. Here was a woman,
well past the first flush of youth, who was straining every sinew and using all her ingenuity not
only to feed and clothe her children, but adamant that they go to school, and learn.
When she insisted that her daughters also attend school, a shudder of apprehension went through
the village of Kangema, their home.
Girls who go to school ended up as prostitutes! her neighbours warned. Maybe so, she
quipped, but they will be educated prostitutes and will be able to negotiate better terms. People
smiled at her sense of humour but there was a lot of shaking of heads. Her daughters went to
school, and were among the first African-trained teachers from the region. Perhaps this inured
the young Mwangi and allowed him to ignore a lot of head- shaking later in life when he was
trying to reinvigorate a defunct organisation.
Despite enormous social and financial problems, Grace Wairimu ensured that all her children
were educated. Much later, Mwangi recounted, when I had my own four sons, their granny
supervised their education and kept them away from harmful teenage activities going around.
When they got their school reports, they went first to their granny, rather than me, their father.
She passed on a wealth of wisdom through storytelling and, in many ways, moulded my family.

Mwangis children have attended the famous Ivy League institutions in the US Yale, Cornell
and Brown and Carnegie Mellon. When she had placed the last one in university in the US,
he said, she rested.
Grace died last year at the age of 98. Given the enormous role she had played in his life, I
glanced at Mwangi to look for signs of sadness. But I only saw pride for his late mother shining
in his eyes. Somehow I knew that when he received his award, he had raised it in silent tribute to
James Mwangi attended Nyagatugu Primary School in Kangema village. But money was short
and the family teamed up to supplement their income by engaging in small business. While this
may have been humbling for the boy, he was nevertheless absorbing invaluable business lessons
that would stand him in good stead for his future.
He was learning, without consciously doing so, the basics of business what people needed,
what they were prepared to pay, how to add value to mundane articles, how to negotiate, how to
make a sale and turn a profit. With no role models to emulate, he and his family were, in effect,
discovering the basics of business all by themselves, based on observation of what worked and
what didnt.
He obtained outstanding results at the end of his primary schooling and this led to a government
scholarship at Ichagaki Secondary School. Here he was introduced, for the first time, to
accountancy and commerce. This was an important discovery, he recollected. I could see how
the systems related to the small businesses we had been doing. We had been going about
business in a haphazard way, but here was a systematic method of doing the same things with far
better results. It was an eye-opener.
Mwangi obtained outstanding O-Level results and went to Kagumo High School to study for ALevels in economics, literature and geography. Whatever he was picking up in theory, he was
mentally applying to real-life situations and his earlier, unformed brushes with commerce. He
obtained a bachelors degree in commerce from the University of Nairobi, passed a Certified
Public Accountancy course and was ready to face the daunting and mysterious world of work.
The Equity Saga
At the age of 28, although he didnt know it himself, Mwangi was primed, in terms of character,
values and down-to-earth business savvy for the major role he was about to play in the nations
commercial life.
Kenya was going through an uncomfortable transition phase from the old colonial structures to
the needs of a relatively new nation. Although there was a huge demand for banking and credit
services, the industry remained more or less a closed shop. It was largely shut out of the financial
system. The international banks turned their noses up at the prospect of catering to the masses.
This led to the growth of numerous indigenous mutual societies.

Many of those who started these savings societies did so with the best will in the world, but lack
of expertise meant they were trying to learn the ropes while on the run. The result was a series of
crashes involving hard-earned money from depositors many of them small-scale rural farmers
vanishing at an astonishing rate.
One of these mutual societies, which had remained standing but was severely battered, was the
Equity Building Society.
In 1993, the chairman, Peter Munga, and the CEO, John Mwangi, turned to James Mwangi, who
had established a reputation for honesty during a period when that commodity was in very short
supply, to help wind up the business. It had already been declared technically insolvent.
That was an understatement, Mwangi told me. To cut a long story short, the building society
had been making losses of Ksh 5 million every year and was now facing a cumulative loss of
Ksh 33 million, the staff had not been paid salaries, morale was at rock bottom and membership
was dwindling by the hour.
But rather than throw in the towel, Mwangi wondered if he could intervene and reinvent the
organisation, transform it completely.
He became the strategy and finance director. At the time, Equity had 27 employees, 27,000
customers, five branches and stood at number 66 out of 66 in the financial sector rankings.
I accepted the challenge because I could see clearly how important a properly functioning
society was to the mass of the people. It was their only avenue out of poverty. I felt I had to do
something somehow square the circle.
But he had no resources, no money, no way of raising capital. A banking licence, which might
have provided some leeway, was not forthcoming. Public confidence in indigenous organisations
was at rock bottom.
How could I entice people to come to Equity? What could I provide that was needed but not
available? I decided to look inside the organisation. If I could change the culture internally, I
would have, in effect, succeeded in reinventing Equity.
Mwangi set about retraining the staff. He introduced a concept which at the time was practically
unknown customer care. Put the customer and his or her needs first he is the most important
person in the world. Treat people with dignity and respect. Serve to the best of your ability.
He encouraged his staff to use their own networks as he did his to persuade people to join the
society. I told them, trust me. They believed me because I believed it myself. If you expect
anyone else to follow you, you must have absolute confidence in yourself.
What he felt most at this time was a heavy sense of responsibility. I knew I could not let down
the chairman and CEO and, above all, I could not let down the customers. When I said trust
me, I meant to keep my word.

The first sign of success, he said, was a complete change in the attitude of the staff. They were
now motivated, they had a direction to follow and what they were doing was bearing fruit. We
were able to give them their first raise in eight years. I also persuaded them to use 25% of their
salaries to buy shares in the company. Now they were involved. It was as much their company as
anybody elses. They knew that if they succeeded, they had a lot to gain.
Slowly but surely, like a ship that was almost sunk, the company began to right itself. Customers,
many of them peasant farmers, were given red carpet treatment. Accounts were kept
meticulously. Confidence blossomed.
In Bangladesh, Muhammed Yunus had demonstrated that the Grameen system of microfinance
was transform-ing the lives of millions who had been shunned by the mainstream banking
industry. It was also helping the impoverished nation to lift its economy by its bootstraps. But
elsewhere, micro finance was seen as something of a charity case throwing away good money
for bad.
Mwangi was convinced that microfinance could not only transform the lives of the masses, it
could also turn a profit. Equitys growing customer base and a healthier sheen to the companys
balance sheet was the proof he needed that the venture was on the right track. Despite the
headshaking within the industry, he and his team ploughed on.
By 1997, we were ready to expand. We invited customers to buy shares in the company and we
started to pay them dividends. The word began to spread Equity was different; Equity could be
Mwangi had witnessed how computer technology was altering business out of all recognition.
But it was commonly felt that such advanced technologies were expensive and that the masses
were too backward for such sophistication. He begged to differ. In 2000, he persuaded the
European Union to support a computerisation programme. The impact was immediate.
Transaction times dropped from 30 minutes to five; queues moved faster and customer service
improved. The whole process, including signatures, was automated. Equity was now on a rapid,
but solid, growth path.
But expansion needed an injection of capital that was still very difficult to come by for
indigenous companies. Approaches were made to Africap, a funding organisation set up by the
International Finance Organisation (IFC) and other partners. Africap provided $1.6 million and
acquired 16% of the whole enterprise. This led to a second wave of computerisation and further
expansion. But in 2004 the company ran out of capital and invited private placements $10
million was raised in two weeks. On the last day of August, 2004, we made our biggest and
boldest step. We became a bank, Mwangi said. We could now roll out a full range of products
and services.
In 2006, Equity Bank listed on the established Nairobi Stock Exchange (NSE). More capital
this time from the giant Helios fund, supported by IFC, CDC, George Soros and Opic, who

bought 25% at $185 million allowed the bank to become the most highly capitalised in East
and Central Africa.
Now, building on the IT platform, we launched an aggressive growth campaign. In seven years,
we increased our branches from 36 to 200, with over 5000 agencies, and the customer base rose
to eight million, nearly half of all bank accounts in Kenya, Mwangi told me.
The figures are mind-boggling. From a loss of Ksh 5 million in 1993, the bank registered a profit
of Ksh 12 billion in 2011. Equity now has the largest banking customer base in Africa. It is the
biggest majority-African owned bank and the most profitable in East and Central Africa. Since
listing on the NSE in 2006, shareholder value has grown 900%, turning a large slice of
shareholders into millionaires.
Mwangi expects profits to rise to nearly Ksh 16 billion this year, making it the most profitable
company in the region. The compounded annual growth rate over the past 10 years has been an
incredible 78% and the bank has been growing ten-fold every five years for the last 20 years.
From a staff level of 27, Equity today employs just under 8,000 people, it now has a presence in
Uganda, Tanzania and Rwanda, and was among the first financial institutions to open a branch in
South Sudan. Its balance sheet of Ksh 250 billion is equal to 20% of Kenyas budget.
Innovations such as mobile banking taking the bank to the people in remote areas and agency
banking, where customers can carry out transactions in shops, has made this once given-up-fordead institution one of the most progressive on the continent.
Stranger than fiction
The story of James Mwangi and Equity Bank from a young boy selling charcoal on the slopes
of the Aberdares to becoming the most successful banker in modern Africa is so incredible that
it almost belongs in the realms of fiction. In this case, fact is far stranger than fiction and a
thousand times more inspiring. But Mwangi remains humble and cheerful, ready to make a joke
at the first opportunity. He has never forgotten the struggles of his childhood days and has set up
the Equity Group Foundation and sought partnerships to ensure that no deserving youth will miss
out on education, nor will anyone forego opportunities through lack of financial knowledge. He
spends half an hour every day running on the treadmill and is a voracious reader. I am up at
3.00 am every day and I read mostly business and management books and biographies, he
His role models?
Nelson Mandela. The way he has changed peoples lives inspires me every day. That is what
drives me the feeling that I am changing lives for the better, being an agent of social-economic
transformation in Africa.
Among his business gurus he counts Jack Welch, the former CEO of General Electric, Bill Gates
(who he says showed him how to think more broadly about society), Bill and Melinda Gates for

their contribution to the disadvantaged in Africa, and Steve Jobs for his technological genius.
What makes him most happy?
Whenever I can bring a smile to someones face, I am amply rewarded.

James Mwangis top tips for business success

Be a dream maker. An entrepreneur is someone who identifies gaps in products or services and
is willing to take risks to make the dream come true.
Do not go it alone. An entrepreneur is dependent on, and relies on, the skills and knowledge of
others. But he must be the leader who can bring these people, their skills and their attributes
together to create something new and useful.
Clothe yourself in values. Your values are what will attract all the other components you need
capital, expertise, partnerships to help you make your vision come to life.
Ask yourself what you can do. What can I do that will be most useful to most people? How
can I change the situation so that what is needed is made available to those who need it most?
Make that your vision and goal and go for it.
Be dependable. If people trust you and you deliver time after time, then when you ask them to
jump, they will not ask why? but how high?
Convince yourself. If you cannot convince yourself that your goal will come to pass, you wont
convince anyone else either. Convince yourself first, with good reason, and others will follow.
Be enthusiastic. Your enthusiasm will infect others and set off a chain reaction that makes even
the impossible possible.
Be patient. Equity Bank is showing its best colours after 20 years of hard work.
Never stop learning. Learn something new every day and try to apply it to your life and
Be humble. Many factors, and many people, come together to make success of an enterprise.

Learning to fly
Under its Wings to Fly programme, Equity Bank has secured a Ksh 6 billion scholarship fund in
partnership with The MasterCard Foundation and with financial support from UKAID, USAID
and KFW to provide 10,000 academically gifted but financially disadvantaged children with
comprehensive secondary scholarships.

The Equity Bank University Sponsorship and Leadership Programme extends a sponsorship to
the best boy and best girl in the Kenya Certificate of Secondary Education (KCSE) from the
districts where the bank operates.
So far, 1,290 students have benefited, with over 65 now pursuing higher education in some of the
best universities in the world, including Ivy League schools in the US.
The Equity Group Foundation, in partnership with The MasterCard Foundation, has
implemented a financial literacy programme in Kenya, aimed at training one million youth and
women. Some 400,000 have already completed the course.
Under its Kilimo Biashara initiative, the Foundation has been deeply involved in the agricultural
transformation of Kenya in partnership with AGRA, the government of Kenya and IFAD.

17 Comments on "The rise and rise of James Mwangi"

Nkatha Mwiraria August 12, 2012 at 9:03 am Reply
Incredible story..i am so proud of you James Mwangi and your efforts to alleviate poverty
and your commitment to improving the lives of millionsyour service to others stands
out and encourages me to always live my life in service to the rest of mankind, no matter
how small and action it counts..may God continue to bless you, you are an inspiration and
you have certainly raised the bar on what we think about ourselves and the future of the
world as a whole

Isaac Leeward September 1, 2012 at 5:39 am Reply
I am greatly blessed to read Dr James Mwangis interview.
It gives us hope that we can transform the African Continent
into an Economic Center of the world with great leadership.
It opens the door for young African Entrepreneurs to dream big.
We have the richest resources on the planet.
We strongly believe less then 10% of our natural and mineral
resources has been extracted.
Isaac leeward
African Economic Analysis/Adviser

Dennis Baloyi September 3, 2012 at 7:00 pm Reply
The story of Equity Bank of kenya is so inspiring. He took banking to the masses, doing
things differently. i am doing the same fighting to take he Stock Exchanges (e.g nairobi,
Johannesburg) to the masses, this is going to be the same based on real African culture
and the management of modern greed, the Equity Bank way.

wilson September 22, 2012 at 11:41 am Reply
How can i get your,magazine,i have never come across it

admin September 25, 2012 at 9:32 am Reply
KENYA YETU is distributed free of charge through select outlets. See the list
under Stockists in the top menu bar on this site. The magazines are distributed at
the beginning of October, December, February, April, June and August. Follow us
on Twitter or Facebook as we will be notifying readers about distribution through
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FRANCIS MAWEU December 1, 2012 at 7:40 pm Reply


Ernest Moyo January 2, 2013 at 9:27 pm Reply

In this day and age, we need more inspired folks like our father and rol model James
Mwangi. Such an inspiration. We are watching closely and building capacity within
ourselves, aiming to get where he is or even better.

joyce kiiru February 4, 2013 at 12:32 pm Reply
congratulations Dr. James Mwangi for your achivements so far. you truly are an
inspiration to many especially the youth.

Lawi kibire February 19, 2013 at 1:42 pm Reply
Proud of you Mr. mwangi

kakande March 13, 2013 at 9:34 am Reply
My God, if only there was one Mr. Mwangi in every 3 African states!!! We would be very
far. BTW i really do like Equity banks customer care services back here in Uganda. They
have changed the way banks operate back here.

Paul karbuali May 18, 2013 at 8:30 am Reply
I celebrate u mr.Mwangi. You always remain my career hero.


Odhiambo T Oketch June 12, 2013 at 7:29 am Reply

You are my Hero. You make me Proud and you inspire my every move at Kimisho

kenneth June 13, 2013 at 1:43 pm Reply
wow what an encouraging story. you are my role model Dr Mwangi.

john ngeno August 26, 2013 at 11:55 am Reply
no one will read your story and fail to be inspired james.your tenacity to the struggles of
your mum,your humility and hardwork and of course love for God and education is realy
inspiring for most kenyans and not only kenyans but the rest of have done it
and you have proved that everything is are a role model

PATRICK MAINA HUNJA August 28, 2013 at 10:01 am Reply
your story give me a lot of hope,you are one among the few people in the are
my role model

ometty September 7, 2013 at 11:02 am Reply
I look up to you Dr.James Mwangi. you have inspired me greatly


ndai murungi September 15, 2013 at 7:45 am Reply

am happy he gave me an opportunity to be in this big story, and taught me techniques in
real customer delight!
till today, i believe in the culture he impacted in me from 2005 to 2009, and the values he
taught are still fresh in my mind.

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