Mama Wairimu, Kenya: Entrepreneurial Empathy : Charles Njoroge

Abstract

A former public servant, Mrs. Wairimu (not her real name), used her lumpsum retirement package to construct three two-bedroom rental units in one of the suburbs of Nakuru Town. Over the last ten years that she has run her business, she is of the view that the rental business is good as it requires less supervision and it provides a steady income stream that sustains her and her family. Before a client rents a unit he/she is required to pay one month’s rent and an equal amount as a deposit. When a client vacates, she returns the deposit less the repair costs. Most often than not, the repair cost is more than the deposit, implying that she has to dig deeper to repair a unit. Also, due to competition, she does relevant upgrades on her units whenever a client vacates to match her competitors in the market. This strategy has the added benefit of increasing the rental income with time. The rental charge in the year 2011 was Kshs.3,500 per unit and as of the year 2020, she charges Kshs.6,500 per unit.

The lapse in months between an outgoing client and an incoming client ranges between two to three months. This means a loss of revenue and also an increase in repair costs. To manage these risks, she prefers letting her units to young families, which, according to her stay longer than other types of clients. Most such clients stay for a year or longer. This stabilizes her inflows and reduces her expenses. Since the year 2016, there were tax changes that demanded payment of a monthly rental tax at ten percent of the gross rental income. This has come with an additional charge as she is forced to hire someone to do the monthly tax returns.

 12th March this year (2020), the Ministry of Health confirmed the first Coronavirus disease (COVID-19) case in Nairobi. The health restrictions made by the government have brought an inexperienced challenge to Mrs. Wairimu: