Equity Bank’s James Mwangi Journey From Rags To Riche
Posted on August 22, 2013 at 6:01 am
James Mwangi the CEO of Equity Bank has won the world’s most coveted awards in the business world among them being the Ernst & Young World Entrepreneur of the Year Award and Forbes person of the year (2012). His rise to the top is fascinating and an inspiring account of triumph against severe odds.
Dr. James Mwangi is the Managing Director and Chief Executive of Equity Bank since 2004.
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.
He spoke to Craig Rix and below is an excerpt of that interview.
Where did Mwangi go for his early school?
James Mwangi attended the 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 in his future.
He obtained outstanding results at the end of his primary schooling and this provided a government scholarship to attend the Ichagaki Secondary School. Here he was introduced, for the first time, to accountancy and commerce.
How was his childhood?
He was 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. James, like the rest of his siblings, had to put in his share of chores – tending to the livestock, making charcoal, selling fruits and other produce for small margins.
What were his mother’s opinion on education?
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. There was one point on which she was not prepared to back down or compromise one iota – that was education. She decided that her children, all her children, would be educated – no matter what it took,”
At a time when girls were not allowed to attend school how did the society react to his mother’s decision to take her daughters to school?
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.
What role did Mwangi’s mother have in his children?
“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.”
Mwangi’s 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.”
Where did Mwangi learn his business skills?
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 didn’t.
How did he find himself at equity?
At the age of 28, although he didn’t 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 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. 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.”
How big was Equity Building Society then?
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.”
What challenges did he face?
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.”
What steps did he take to revive 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.”
When did he see the first signs of success?
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 else’s. They knew that if they succeeded, they had a lot to gain.”
The word began to spread – Equity was different; Equity could be trusted.
Who are his role models?
“Nelson Mandela. The way he has changed people’s 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 someone’s face, I am amply rewarded.”