EDITOR’S NOTE: This article is part of our Money254 Partner Series produced in partnership with Absa Bank Kenya.
What is your peculiar Kenyan habit? Mine is, I cannot help but bargain whenever I am in a transaction that involves cash. I think I got it from my mum.
Growing up, my mum would occasionally take me shopping in Gikomba. If we happened to get some nice clothes that I liked, mum would whisper to me to stay quiet and start by putting the seller on the defensive.
“Hii shirt ni ngapi, na inakaa ile ya kufade?”
Then the negotiation would start.
“Hii shirt ni camera mathee, na ni Ksh800 pekee.”
“Hii hata haiwezi pita mia!” Oftentimes, she would start by making a ridiculously low offer that would always leave me really embarrassed.
However, the result was almost always paying a quarter of the price the vendor quoted at the beginning of the negotiation.
I was always afraid that her relentless negotiation would cost me my desired clothing item. But I would always be amused as the haggling would end with the seller smiling and congratulating my mum’s street smartness.
“Naona wewe Mathee ni mjanja sana,” they would often say while closing the deal.
I am my mother’s son in many ways. I have a tendency to negotiate every situation where money is involved. Always looking for the best deal possible even when many would simply pay and move on. From clothes to household items, to my salary, and even rent - everything is a candidate for negotiation.
Last year, I surprisingly realised there was one area of my life I wasn’t really negotiating, comparing alternatives and getting the best possible deal. My choice of banking partner.
The experience eventually prompted me to change my bank, which I had been using for 8 years.
This has been my journey to what I consider to be financial transformation.
I am a trained agronomist. However, I have never worked in the agribusiness industry. I graduated in November 2019, and like most of my friends, I applied for all manner of job opportunities that came my way.
One of those many applications was to a mid-sized real estate firm that was looking for interns which turned out successful. As an intern, I worked across the company departments - from sales, to research, project management, to even helping with social media management.
After three months, the marketing director was happy with my work and offered me a full-time contract. My take-home came to about Ksh36,000. That is how I ended up in marketing with very little training.
Unfortunately, I only received one month’s salary before the pandemic struck. I was laid off as the company worked on surviving with as little expenses as possible.
I went back upcountry just in time to evade the lockdown. Luckily, my father was able to pay for a few short courses in marketing that kept me busy.
In January 2021, I was called back to take back my old job. The reality of going for months without pay built in me a strong desire to have a stable emergency fund. It helped that I did not have many responsibilities living in a shared bedsitter with my best friend from campus.
By June 2022, I had hit my target of saving Ksh100,000 in my emergency fund - with some hiccups here and there. I moved the money to a savings account in the same bank where I operated my salary account.
I had been operating a small tours and travel company on and off while on campus. Having fully settled into my role, I was able to gradually start working towards putting my tours and travel company back on its feet.
By August 2022, I had about Ksh20,000 saved in addition to my emergency fund. This was enough to cater for some marketing costs, including a basic website and a small budget for creating ads on Facebook.
As the side hustle started picking up, my savings were also growing and I joined a savers group on Facebook to learn some of the tips they were using to get better.
One contributor wrote an informative post about the importance of understanding the interest accrual terms your bank uses.
I followed up with my bank and was surprised to learn that from all my savings, including the Ksh100,000 emergency fund I had worked so hard to build, not a single shilling had earned interest yet.
The relationship officer explained that the account was supposed to earn 3% annually on an annual accrual basis. This meant that the interest would only be added to my account after the lapse of one year, which in my case would be in June 2023.
That is to say, if I withdrew all my money after 11 months and 3 weeks, despite saving diligently for that long, I would not get any interest!
I couldn’t believe no one told me this when I was opening the account.
Shocked by the terms, my innate desire to get the best value for my money was triggered. I became more proactive in researching various banks to provide me with the full terms and conditions of their savings accounts.
In February this year, while doing my research, I came across the Absa Digital Savings Account, which at the time had a much higher interest rate of 7%, and surprisingly also offered daily interest accrual.
After doing some due diligence and confirming the terms and conditions, I moved all my savings into the Absa Digital Savings Account.
This experience opened my eyes to the fact that a bank is not just a bank. While banks may generally have similar product categories, the right bank for me had to be the one that can support my unique financial goals in a manner that makes sense to me.
For the same amount, my savings were attracting interest on a daily basis at Absa, while I had to wait for 365 days in the previous bank that I had been loyal to since the year I got my ID Card.
I now get a 9% annual interest rate after a revamp in May 2023. My savings accrue interest on a daily basis and compound at the end of every month - meaning the interest I earned in September is earning interest in October even if I don’t top up. I can also withdraw during emergencies with no penalties.
As I was starting out, I noticed that I was forgetting to deposit my savings from the salary account that was still with my first bank to the Absa Digital Savings Account.
When I sought to set up a standing order to automatically deduct and deposit my savings every 5th of the month, I was taken aback by the high fee my bank was charging me.
Luckily, I had already created a good rapport with a relationship officer at Absa, after moving my savings account there.
On contacting her, I was pleasantly surprised to learn that if I moved my salary account, I would benefit from a free standing order - and make adjustments as needed digitally. This is how I ended up closing my old current account and moving it to the Absa One Account.
Effectively, I had ended my relationship with the first bank that I had joined soon after getting my ID card to simply be receiving a stipend from my high school teaching gig.
Meanwhile, the investment I was making in the tours and travel side hustle was beginning to pay off. It also helped that my real estate marketing job involved several out-of-office activities that allowed me to meet potential clients.
But it seems that with every blessing, comes a new set of challenges. Juggling between work and the side hustle was starting to overwhelm me. This is simply because more clients needed more attention and if I did this, work would undeniably suffer - yet I am not willing to let go of a steady paycheck anytime soon.
I had no choice than to make a decision I thought I would never need to. Hiring a family member. My brother, who had recently cleared campus and had shown some interest in the tours and travel business, was available to take an active role whenever I was engaged at work.
It turned out to be a great idea.
Now, the increased business did not just add a strain to my time, but also to my finances. We were beginning to need more than just a few thousands to organise trips. Every now and then we would need some Ksh20,000 here, Ksh45,000 there and thereabout to pre-book hotels for clients or a tour van for sporadic corporate clients.
I needed to find a way to provide the side hustle with cash injections without necessarily forcing corporate clients to pay upfront (and risk losing the deal) or constantly withdrawing from my savings account.
The last time I tried to apply for a personal check-off loan from my old bank, I was faced with a litany of requirements including an MoU with my employer - that also required all employees of the company to open a salary account with my bank before my loan could be approved. Suffice to say, that option was dead on arrival.
So you can imagine how happy I was to learn that I could qualify for the Absa Classic Credit Card that comes with a limit of up to Ksh100,000 and an interest-free window of up to 50 days! Mark you, my corporate clients pay within 30 days.
Here, I had literally stumbled on an unsecured working capital loan that I needed not pay interest on as long as I paid back in full before the 50-day interest-free period lapsed.
It was a no-brainer for me since the minimum salary requirement is Ksh20,000 for existing Absa customers and the card doesn’t charge a joining fee and no annual fees for life.
It has been such a boost to my side hustle. All I need to do is charge any business expense that exceeds Ksh20,000 to my credit card instead of raiding my savings and once the client pays, I pay back the balance before my 50-day interest free window lapses.
These experiences have really opened my eyes to how beneficial it is to have the right banking partner. I can already foresee other products I can sign up for as time goes on by sticking with the same bank that literally “gets me”.
With my dad retiring by the end of the year and the company-provided health insurance cover expiring with it, Absa bancassurance can provide a pre-negotiated cover for both him and my self-employed mom.
My bro is surprisingly getting good at handling clients that I am thinking we could expand to car hiring services. I could get up to 100% financing to purchase a brand new tour van with Absa vehicle finance on a 6-year repayment plan. I could also raise a down payment and buy a locally-used one and get 50% financing or thereabout depending on how much down payment I am able to raise.
Now, one of the automatic benefits I got from simply opening the Absa One current account is exclusive invites to Absa Connect lifestyle events to network. Someone I met at one such event, became a client last month.
I can’t imagine how many more clients I can get from these events if I put more structure to our side hustle. There is even a whole suite of business accounts from Absa to choose from with benefits, such as business advisory services and trainings.
Maybe it’s time to separate personal from business finances and actually give bro a proper job title?
I am finding that Absa seems to have every solution for each of my many obligations giving me a wholesome banking experience.