Masiko’s sh500m journey

At 36, Amelia Masiko retired from the civil service and turned to entrepreneurship. However, her journey into a sh500m microfinance and flower business has had hard falls, writes Ritah Mukasa.

Upon graduation, Amelia Momo Masiko was short-listed to join public service and at the same time, Shell Uganda offered her an employment opportunity.

However, owing to the political turmoil at the time, she fled to Nairobi, Kenya. At 22, she was lucky to find a job in a tea exporting company owned by Ethiopians.

She would also serve as secretary for the Uganda People’s Movement (UPM) women’s wing.

When the National Resistance Army (NRA) captured power in 1986, Masiko returned home and joined the Office of the President; working in the human resource department until her resignation in 1994.

Trying her hand at entrepreneurship

“The circumstances dictated that I resign. It happened very fast. I did not prepare for exit,” she says.

“I had three children to fend for and my husband’s salary couldn’t sustain the family,” she adds.

Masiko’s orchids bring colour to the home.

Meanwhile, two years before she quit her job, Masiko had been selling secondhand clothes to workmates and had saved sh3m.

She also got gratuity totalling sh2m and a friend lent her sh1m.

The 36-year-old then, relied on sh6m to invest in business.

“I would buy bales of secondhand shoes at sh100,000 each and sell them at a profit of sh100,000,” she says.

However, before the business took off, a friend advised her to venture into maize trade. She was assured of an order of 500 bags.

“Excitedly, I collected my capital from the bales business and travelled to Busoga to buy the maize,” she remembers.

Unfortunately, that friend disappeared before Masiko could supply the maize. Luckily, she had not yet paid for the maize but had spent about sh200,000 to buy the empty bags from Kampala.

She tried to resell the bags in vain. Around that time, she met another friend who interested her into trading in coffee in Rwanda.

Since she had the empty bags, Masiko went in for it. Unfortunately, it also failed but she recovered her money.

She immediately jumped on to the bandwagon of importing goods from Dubai in the UAE.

“I had not researched about the products to import, prices and where to sell them. I just went,” she recalls.

Masiko remembers importing everything including skirts, blouses, nail varnish, dolls, bedsheets and belts.

At the airport, she was charged sh1m in taxes, which she did not have but made a commitment to pay later. This she fulfilled.

However, selling the goods was not easy. She did not have any outlet, so she vended them among acquaintances, family and friends.

“I recovered my sh6m capital but did not get any profit because of friends who failed to pay me,” she says.

“I never went back to Dubai because I realised this business wasn’t realistic as it was portrayed,” she adds.

Going forward, Masiko went into maize growing. She leased 10 acres of land (in Luwero district) at sh500,000 a season and planted corn.

“The maize yielded well, but I failed to get market and abandoned it in the field,” she says.

In the meantime, she gave her remaining capital of sh4m to a friend who owned a forex bureau in Kampala. She would earn 7% interest every month and this sustained her.

A business partnership

In 1996, Masiko, with four former workmates, ventured into a restaurant business on Nkrumah Road in Kampala. 

The friends did not have enough capital, so they shared responsibilities. For example, Masiko paid three months’ rent at sh400,000 per month, while colleagues bought furniture, a deep freezer, cookware and food to begin with.

In the same way, they shared responsibilities — cooking, cleaning and serving customers. All was well. They used to feed about 150 clients daily. But this business failed after three months due to management issues.

“It was a hard time for me but I hated going back to public service. I wanted to be self-employed,” Masiko says.

Worse still, around that time, she got a marketing job with a forex bureau but was not paid for a month and she quit.

Masiko then tried getting a job with Uganda Development Bank, but a secretary at the bank embarrassed her.

“She blurted out that her boss doesn’t waste time with job seekers. This pushed me to think outside the box,” she adds.

Masiko also tried to join a women’s SACCOS in Kansanga for capital but the chairperson turned her down, saying the SACCOS are for poor people. And yet she did not look needy.

Getting into Microfinance

As luck would have it, amidst all the frustration, Masiko reunited with Henry Bagazonza, a friend she met in Nairobi.

He was working with the then Rural Microfinance Centre. The firm was looking for agents who could disburse small loans and recover them as well.

Masiko first got a loan of sh3m to start a business, but later she decided to lend the money to a friend at an interest of 5% per month.

All was well until the client/ friend disappeared before repaying the loan. She dragged him to court but lost the case.

Masiko had to pay back the loan. This time around, she decided to concentrate on being an agent and debt collector.

In 1999, Masiko formed another partnership with three other friends. They registered a company and rented a small office space on Kanjokya Street in Kampala. But none of them had microfinance knowledge.

“Rural Microfinance Centre offered us 10% commission on the loans we recovered. We helped them collect over sh800m in the first year,” she recalls.

They would traverse markets and shops while recovering loans from Rural Microfinance Centre clients. From the first commission, the team bought a car to ease transport.

In 2000, Masiko got a scholarship at Uganda Management Institute to study a diploma in management specialising in finance.

Upon completion, she pursued a master’s degree in the same field and then a diploma in law from the Law Development Centre.

In 2001, Rural Microfinance Centre gave the team a loan of sh50m at an interest of 13% per year.

They started lending money at 3% per month. All was well. The business grew to a portfolio of about sh1b in four years.

Unfortunately, in 2005, the friends disbanded due to irreconcilable differences arising from individual interests.

They shared the portfolio (which had fallen to about sh500m due to bad debts) and parted ways, but Masiko remained in business.

She brought on board two other friends, pooled money and started another firm — Remod Enterprises, a moneylending company.

“I used my land title to get a loan of sh100m from the defunct Nile Bank and injected it in the business,” she explains.

In 2007, after paying almost 60% of the loan, they topped up and got a mortgage of sh300m from the same bank.

The team bought a prime property on Kanjokya Street for their offices. In 2009, the business made a breakthrough when a Netherlands credit agency advanced them a loan of sh1b at 18% per annum.

“This was our turning point. The capital we had was too little to serve the big clientele we had attracted. The sh1b took us far,” she says.

They were lending the money at 5% per month.

Meanwhile, they used part of that money to pay off the outstanding loan from Nile Bank and used the balance to capitalise the business.

Flying solo

By 2012, the business had grown to sh2b. Unfortunately, the partners developed misunderstandings that led to its collapse.

They shared portfolio and parted ways. In the process, they lost sh500m in uncollected loans.

Masiko also took a loan and started all over again. She relied on the clientele they had built. But this time, she partnered with her family, including her brother and three children.

They set up Trust Hands of Hope Limited on Prince Charles drive in Kololo, Kampala and registered it.

Starting off, she had saved sh20m. Her brother provided sh20m and his wife, sh40m.

Masiko’s son and husband injected in sh5m each. However, the sh90m she had collected was not enough for the clients she had.

“A friend loaned me sh260m unsecured but with an interest of 3% per month. I would lend it at 5% and make a profit of 2%,” she elaborates.

In 2018, she paid off the loan and in 2019; got a low-interest loan from FINA guarantee trust bank of sh400m.

Business growth

“Business was thriving until COVID-19 hit us but we are trying to recover,” she says.

Effects of COVID-19

Masiko says by the time the COVID-19 lockdown was announced, they had disbursed loans totalling to about sh1.5b and so far the repayment is bad yet they are servicing a loan of sh600m.

“This has taught us to be patient while praying to God to normalise people’s businesses for them to pay,” she says.

“Bad loans notwithstanding, we try to operate within our means and minimise borrowing until we clear off the loan,” she shares.

Masiko also found it hard to pay office rent during the lockdown, but luckily, the landlady reduced it by almost 30%.

“COVID-19 has also taught me to be prepared for tragedies in business and quickly adjust. Savings are also important,” she says.

 The future

Masiko envisions using her experience to mentor young entrepreneurs to know how to start and sustain their businesses and the mistakes to avoid.