Defying great odds in a market characterized by cut throat competition, non-deposit microfinance institution grows its loan book by a whopping 1,135% p.a in the last fourteen years
By George Gichuki
Fourteen years ago, calm, collected and unbelievably audacious, Mr. Mbaabu Muchiri set on a journey whose destiny he could not easily define. After spending years in the corporate world where he honed his skills in leadership, strategy and finance, he decided to venture into the uncharted waters of entrepreneurship. This is a field whose rigours humble professional giants and deep pocketed individuals. It requires unparalleled patience, quick thinking and unlimited ability to absorb shocks. Yet, Mr. Mbaabu opted to trade comfort for identity.
At the height of his successful career in finance, where he had served as one of the top executives in a blue chip financial institution as well as a bank supervisor at the Central Bank of Kenya, he decided to open a new chapter in his life. Armed with a seed capital of only Kshs. 8.5 million, he started a business in microfinance. He aptly named it Progressive Credit. Indeed, humility defined his early days as an entrepreneur. “In those days, we were operating in a tiny office (measuring only 321 square feet) in the then Pan Africa House (now renamed Sanlam House), located in Nairobi’s Kenyatta Avenue,” Mr. Mbaabu reminiscences. Starting with only four employees, today, this number has grown to over four hundred.
Making progress
Naming a brand is an exercise that should be undertaken meticulously. It plays a major role in winning customers and shaping the brand’s communication. True to its name, Progressive Credit has since 2011 made steady progress by onboarding over forty thousand customers from a mere one hundred and twenty, opening twenty seven branches in eighteen counties and moving to an ultra-modern headquarters in Nairobi’s Upper Hill. “ Our current loan book is Kshs. 1.6 billion up from Kshs. 10 million in 2011 – a phenomenal growth of 1,135% p.a,” Mr. Mbaabu affirms this progress. The first customer of the lender got a small loan of Kshs. 150,000.
One of the key drivers of this steady progress has been giving customers an exemplary experience. “We are a customer centric institution and powered by our core values -teamwork, professionalism, integrity, passion, innovation and customer delight – our productivity is enhanced,” says Mr. Mbaabu. “By the same token, we have got a very effective leadership and management team,” he adds. Each branch and product offered by the lender has a team leader who motivates and guides the members so that they can achieve their targets.
Progressive Credit is also big in technology. By and large, this has contributed to its steady growth. “We have a core banking system (Microsoft’s business central) which runs the operations of our business across all the branches,” says Mr. Mbaabu. Additionally, the lender has a loan originating system dubbed CTS which has been developed by its staff members. Going digital has enabled it to reach more customers efficiently and effectively. Indeed, they are able to access loans within minutes via their mobile phones.
Strong corporate governance is essential for steady and sustainable growth of organizations. To that end, at the helm of the fast growing lender is a team of directors whose key mandate is driving its strategy. “All our undertakings as a business are guided by the strategy outlined by the board,” Mr. Mbaabu avers. “We make projections, study the market and develop products that resonate with our customers among other initiatives, based on that guidance.”
The growth of customers – from one hundred and twenty in 2011 to over forty thousand in 2025- has mainly been due to the expansion of branches and deployment of agents in all the areas where the lender has a presence. In the same vein, Progressive Credit organizes forums through which it networks with existing and prospective customers, besides executing advertising campaigns through the media.
Product offering
Progressive Credit is a non-deposit taking microfinance institution regulated by the Central Bank of Kenya. Based on its license and the needs of its customers, the lender has developed an array of innovative products. It has segmented its customers into micro, small and medium enterprises, corporates and agribusiness. Each segment has products that are suitable to its needs. Additionally, it offers consumer (check-off) loans for salaried customers as well as log book loans.
In this era of digitalization, the lender has developed an innovative product that is disbursed via mobile phones. Branded ‘nawiri’ (to flourish), the product is popular among customers who are topping up their loans. Since these customers already have a relationship with the lender, they can access as much as Kshs. 120,000. By the same token, other loan products are also disbursed via the mobile banking platform.
Progressive Credit embraces a hybrid lending model. Customers are either served digitally or through the branch network. By serving customers physically, the lender is able to know them in a better manner (KYC), besides establishing their needs and an emotional connection with them. Physical contact also creates room for customers to offer collaterals for big ticket loans. “Once we meet our customers physically, we start building a relationship and after that, they can access quite a number of our products via their mobile phones,” Mr. Mbaabu says.
To mitigate the risk of defaulting, Progressive Credit scores the customers who want to access mobile loans through an engine by reviewing their borrowing history for instance. The tenure for business mobile loans goes up to three months. Check-of loans are also accessed through the mobile phones.
Fighting spirit
To demonstrate its resilience, Progressive Credit successfully navigated the COVID-19 pandemic from 2019 to 2022. It was a tough period for businesses across the globe since there was a slowdown in the economic activities. Additionally, to keep pace with the fast growth of its business, the lender has been strengthening its human capital by bringing on board talented employees.
In the next five years, Progressive Credit is confident of winning a significant share of Kenya’s lending market by developing more innovative products, strengthening digitilization and expanding its footprint in the country. “Our customers remain the strongest pillars of our business and they are assured of our relentless support as they strive to succeed in their businesses and improve the living standards of their households,” Mr. Mbaabu confidently says.
Since 2011, Progressive Credit has transformed the lives and livelihoods of many customers – especially the micro, small and medium enterprises – by offering them products that have effectively addressed their needs.
