The matatu industry is considered one of the largest employers in Kenya and is a profitable undertaking depending on who you ask. Shoko Beko got into the matatu industry in 2003 starting out as a tout. He told Citizen TV Yvonne Okwara that his daily take home was a paltry Sh150.
Today, he is the owner of ZAM ZAM Sacco, a fleet of matatus plying the Nairobi-Githurai route. Here is his inspiring story including the challenges in the sector as told by WoK.
Buying Matatu
After working as a matatu tout for about two years, he was promoted to supervisor in 2005 and manager in 2007.
In April 2008, he bought his very first matatu using Sh800,000 savings and a loan. Business was good and when banks began rolling out loans, he took advantage of that to expand his business. He joined SuperHigway Sacco and also became a treasurer there.
Founding Zam Zam
As his vehicles increased in number, he left SuperHigway to form his own Sacco named ZAM ZAM 45 Limited. The matatu business was thriving and he continued adding to the number of his vehicles. In fact, he said that at some point he had up to 50 buses.
However, he had to sell some of the buses because of prevailing hard economic times that have made the business a loss making venture.
ZAM ZAM grew into a notable brand plying the Thika road and dropping off passengers at Githurai. When he ventured into the business, a litre of diesel was only Sh54 but prices have since gone up.
Challenges
While the business was good and enabled him to grow, he told Citizen TV that he cannot advice anyone to venture into it. He said that these days it has become hard for owners to make a profit in the business. The number of players in the industry have increased considerably and so has fuel prices.
The Sacco owner said that the costs of maintaining a matatu are on an upward trajectory due to: insurance, seasonal county fees, and advance tax. There is also the cost of repairing the car and making sure it is roadworthy.
Added to this, is the monthly loan he is supposed to repay to the bank that helped facilitate the buying of the vehicles. He said the cost of maintaining a vehicle is about Sh400,000 to Sh500,000 every two months making the business less profitable. This has forced him to sell some of his cars and others have been auctioned off.
Asked by Yvonne Okwara what advice he would give to an investor who wants to get into the matatu industry, the businessman said he would not dissuade him against burning his fingers from what he describes as a loss making venture.
“Lakini saa hii mahali imefika iko mbaya, si mzuri. Hata ile gari tuko nayo tumeshindwa kulipa loan. Watu wanachotea gari”, he told Okwara.
“Wakati hii siwezi danganya mtu aingie kazi ya matatu. Nitakuwa nimemudanganya matatu iko na pesa na akuje aende hasara. Ile tuko nayo tumeshindwa kumanage“, he added.
Zam Zam Sacco
Zam Zam has had a chequered past. Perhaps, this is the reason the owner’s view towards the profitability of the matatu business has changed considerably.
Their vehicles are not only notorious for careless driving but in the past have also made headlines for throwing passengers out of their moving vehicles leading to their untimely death.
