Eddie Mugulusi, Founder at Fab Creations Ltd
There is this guy called Philly that I met a little over a year ago. At the time of our encounter, we were in need of a skilled and reliable vehicle mechanic within the Gayaza area. You see when you have distribution vehicles that are always on the road, you need a good mechanic to keep them in good shape and Philly was just the person for the job. Within days he began to prove himself handy identifying the smallest issues that could be potential problems if left unattended. His attitude towards work was exceptional and unlike many mechanics today, he was not in the habit of exorbitantly pricing spare parts. We figured we might have hit a jackpot with this guy at least up until the point we requested for a simple receipt pending payment. He smiled and looked rather confused. His garage had never owned a receipt book. Philly was a good mechanic but like the majority in his field, he did or does things the ‘jua kali’ way.
The word ‘jua Kali’ originates in Kenya where it is a direct translation for “hot sun” in Swahili. It is popularly used to refer to an informal sector in Kenya comprising of informal traders and artisans who often work in open spaces (in the hot sun) or under poor infrastructure. Just like the popular area known as Katwe in Kampala, the traders comprising the ‘jua kali’ sector in Kenya are renowned for their ability to create almost anything on demand.
It is quite interesting to note how most business is conducted in this setting. There is often no paper work done: the businesses are not formally registered, there is no book keeping, receipting or invoicing. There are no filed sales logs to show incoming revenue, items such as profit and loss accounts, monthly projections and reports don’t exist. It is difficult to know whether or not they are actually profitable. They often have no bank accounts and prefer to keep their day’s earnings electronically on mobile money. It also goes as far as employing people by mouth without any binding agreements whatsoever. Technically speaking it is as though these businesses do not exist. The proprietors could literally up and leave at any time.
This appears to be the reality of most small businesses in Uganda’s informal sector. Now because they exist and operate this way, it is almost impossible to track their progress due to unavailability of records. Are they profitable or not? Are they growing or not? Such businesses in fact are unable to attract or find funding/financing in the form of grants, credit or equity investment. It is partly for this reason that they often stay at the same level for several years (exponential growth requires some sort of financing).
There are numerous opportunities that come with doing business the right way. At Fab creations we have built corporate systems that have allowed us better understand where the business came from, where it is currently and where we want it to be. This kind of picture is only possible with proper records. Although time consuming, we actually capture all the data I mentioned in the third paragraph above. Using that data we then generate weekly, monthly, quarterly and annual reports. As a result of putting in place systems that promote accountability, the company is position to attract and get financing.
I am glad to report that Philly now owns and issues headed receipts under the name ‘Philly and Sons Garage’. His business is more organized today and is gradually becoming a model garage in the area. He still has a long way to go but am happy his head is in the right direction.
How are you handling things? Are you with the ‘jua kali’ trade?