One of the traits that define outstanding entrepreneurs is their ability to identify and relentlessly pursue business opportunities. By avoiding the trodden path, they turn such opportunities into successful enterprises within a relatively short period of time. In the process, they create wealth and numerous income generating opportunities for their respective nations. The success story of Urithi Housing Co-operative Society Limited exemplifies this spirit.
Three years ago, a group of ten likeminded entrepreneurs from Thika in the central region of Kenya teamed up in a bid to establish a business which would not only be a source of income during their retirement days, but also an inheritance for their children. After putting their heads together, they identified housing as the most ideal venture for the goals they had identified. This saw the birth of Urithi (Kiswahili for inheritance) which within three years has become a giant housing co-operative society in Kenya, with mega projects to its credit.
To successfully steer a ship to its destination, a resourceful captain and crew are required. In that regard, Mr. Samuel Maina and Mr. Daniel Kamau were chosen as Urithi’s first chairman and treasurer respectively by the members. Consequently, they were given the demanding task of spearheading the organization’s growth in its demanding days as a start-up ( they still hold the two positions to date).
In order to reduce the burden of overheads, the chairman allowed the young organization to operate from his private office in Thika town for the first eight months. “ Besides giving Urithi space in my small office, I also shared the services of my secretary with the young organization since its financial resources were limited,” Mr. Maina recalls. Indeed, to demonstrate the high level of sacrifice made by the ten founding members in the formative days of the organization, none of them was getting paid for rendering his or her services.
To start with, this team purchased a three acre piece of land at Gatuanyaga (along the Thika – Garissa road) at a cost of Kshs.3.6 million. They raised Kshs. 360,000 as a down payment for the maiden transaction. The land was subdivided into thirty plots and each was sold at Kshs. 150,000.
After eight months, Urithi formally opened its first office at Rubia House in Thika town. It also recruited five members of staff to oversee its operations. Moreover, it purchased its first vehicle as it embarked on an ambitious marketing campaign to recruit more members. Currently, it is operating from its own office block at Thika’s Section nine estate. As a sign of the organization’s fast growth , it is putting up a modern office complex at Ruiru town which will serve as its headquarters in the near future.
Another feather in Urithi’s cap is the growth of its membership from the ten pioneers, to the current 12,800. “We intend to grow our membership to 20,000 by end next year and to 60,000 in three years in line with our strategic plan,” says Mr. Maina.
Precisely, Urithi was registered by the government as a housing co-operative on 24th September 2012. It serves under the Ministry of Industrialization and Enterprise Development‘s co-operative department. Legally, the organization subscribes to the Co-operative Act Cap 490 that governs all co-operative societies in Kenya.
It was founded to help in mitigating the risks of those who are unable to access the services of housing co-operatives, by virtue of where they work or the nature of their profession. “ As a co-operative, we have brought people from different socio-economic and political backgrounds together and they have benefited immensely from our unique product offering,” shares Mr. Maina. “ We have products for the low , middle and high end market segments ,” he adds.
Since its inception, Urithi has made great strides in addressing the housing challenges caused by economic downturns that make it extremely difficult for many people to own assets like land and houses.
“ We acquire land at negotiated prices and by leveraging on economies of the scale, we are able to sell it at subsidized rates to our members,” says Mr. Maina. “ The small profit realized is shared as dividends by the members , besides being used to facilitate value addition activities like construction of roads, water installation , electrification, fencing and tree planting in our housing projects,” he adds.
Urithi Olive Villas.
Over the last three years, the fast growing organization has successfully completed over 34 projects in various parts of the country while 32 are at different stages of construction. In addition, it has issued 3,400 title deeds, while over 3,000 others will be processed within the next five months. According to the chairman, Urithi’s target is to complete all its ongoing projects by February next year.
“ We realize that most people at the bottom of the pyramid cannot access financing to buy land or houses because they do not have collaterals, “ Mr. Maina observes.
“ As a co-operative, we have given them a platform to pool their resources and ultimately, they have acquired pieces of land and decent houses,” he further says.
The organization also educates its members on the investment opportunities available in the lucrative real estate market.
Despite making major breakthroughs in its undertakings, Urithi has faced a number of challenges. To start with, some of its members ( mainly the ones running small businesses or in low paying jobs) are unable to finish paying for their houses or plots within the agreed time frame.
Secondly, many Kenyans are risk averse and they therefore rarely invest huge sums of money in asset classes they are not familiar with. “ In that regard, we undertake extensive education campaigns through the media and public forums so that both our existing and potential members can understand our business and the projects we are undertaking,” observes Maina.
In a sector where many investors have lost their hard earned money to unscrupulous traders, Urithi stands out because of its exemplary business ethics. “ We do intensive due diligence to ensure that all the land we put on sale to our members is genuine and we issue them with title deeds within two months after they have settled their payments, as opposed to share certificates,” says the chairman. Being a legal document, a title deed comes in handy when one is need of financing. In addition, a member can easily trade with a piece of land which bears this important document.
The organization differentiates itself from other players in the competitive real estate business by offering unique products and services. It focuses mainly on the construction of decent and competitively priced residential and commercial centres. Currently, it has a presence in four counties: Kiambu, Nairobi, Nakuru and Kajiado. In three years time, it is planning to expand into seven more counties as per its strategic plan.
Significantly, Urithi’s projects are aligned to the rolling out of Vision 2030 flagship projects including : Konza Technology City, Lamu Port- Southern Sudan Ethiopia Transport ( LAPSET) and various by-passes which have been constructed to ease traffic congestion around Nairobi. “ We purchase land in such strategic areas on behalf of our members before any developments have taken place ,” Mr. Maina observes. “The value of this land appreciates a lot when the developments commence and our members therefore realize high returns on their investments,” he adds.
Moreover, before buying a property, Urithi researches on its location and bargains on the best price possible. “ We also engage a team of professionals comprising architects, structural engineers, quantity surveyors and lawyers among others to advice us on various technical issues pertaining to the real estate business,” he further says.
In line with the modern business practices, Urithi has developed strategic partnerships with financial institutions including, commercial and microfinance banks. More importantly though, the organization works closely with its members in developing unique housing concepts which meet their ever changing needs.
To start with is the ‘own a room’ concept which was launched three years ago. It targets the youth, young families and students looking forward to having their own shelter, as opposed to paying rent. The first project in this category was put up in Juja on a half acre plot. It comprises 374 bedsitters and a few commercial units. The second one ( also in Juja) is nearing completion and it has over 700 units. Urithi is planning to roll out this concept in Nairobi, Mombasa and Nakuru among other major towns in the country.
Secondly the organization’s ‘nyumba mia’ concept entails developing modern housing units in secure and serene locations . These houses have a fence and a gate so as to enhance their security. The concept targets middle and high income households who nowadays are preferring to live in gated communities, in line with the modern housing trends. It has successfully been rolled out in Thika, Juja, Mombasa and Rongai.
The road ahead
Urithi has developed a three year strategic plan which is anchored in its mission, vision and core values. “Our vision is to be a principal provider of housing and settlement solutions in Kenya, while our mission is to improve the quality of lives of our members through the provision of decent housing and settlement using innovative technologies,” shares Mr. Maina.
One of the organization’s strategic goal is to have a membership of 50,000 within the next three years, who will in turn create demand for its products so as to grow its revenue base through improved sales and excellent customer service. It is also planning to increase its product range through diversification into other sectors like education, insurance and hospitality.
Indeed, the ambitious Urithi has already made inroads into the hospitality industry through the Hilltop Resort project it is currently undertaking in Nakuru. In this regard, it is intending to build 80 cottages which shall be sold to its members at a cost of Kshs. 2.5 million each, and Kshs. 3 million to the non members . On average, each cottage is expected to raise a minimum of Kshs. 3,000 per day. Once complete, the facility will be run by Uriithi. It will comprise a hotel, two wedding gardens, a club house and a gymnasium. It is ideal for conferences, retreats, weddings and honey moons.
“ In the last one year, we have put in place effective structures and systems to enable us manage and sustain our fast growth which we have mainly achieved due to the support of our loyal members ,” the chairman concludes.