The Somali community residing in Eastleigh, a suburb of Nairobi, Kenya, has garnered recognition for its exceptional entrepreneurial spirit and business success. This community has effectively transformed Eastleigh into a bustling hub for trade and commerce, drawing customers not only from the city itself but also from beyond its borders.
At the heart of this remarkable achievement lies a fundamental quality that has often eluded traditional entrepreneurs: trust. Trust is the cornerstone of the Somali community, facilitating the pooling of capital among family members and close friends to initiate profitable ventures that have a far-reaching economic impact on the broader society.
It comes as no surprise that Somali enterprises in Eastleigh have evolved into a model of success, capturing the attention of private investors not just within Kenya but also from around the globe. Hassan Bashir, the Managing Director of Takaful Insurance, attests to the pivotal role trust has played in propelling their business growth. In a previous interview, he emphasized, “Our business model hinges on trust, as exemplified by our community. Such enterprises thrive because they are built upon the human spirit.”
Mr. Bashir, who also serves as the Chairman of the Board of the Crescent Takaful Sacco, underscores the paramount importance of trust in nurturing strong relationships and driving business expansion. He stresses that trust is a foundational concept they are committed to cultivating, aiming to establish a resilient business culture.
Bashir elucidates that people naturally prefer to engage in business dealings with individuals they trust, a principle that guides his own interactions as well. Another key factor contributing to the prosperity of the Somali community’s businesses is their willingness to embrace risk and accept narrower profit margins, differentiating them from others. As Bashir elaborates, “While other traders seek higher margins, Somali traders focus on lower margins and prioritize turnover, emphasizing competitiveness in pricing.”
One distinguishing aspect of Somali traders is their keen ability to identify potential conflicts of interest that could pose a threat to their businesses. Their proactive approach to addressing such issues underscores how trust is not just a foundation of reputation but also a critical element that sets them apart from competitors. Thus, safeguarding, strengthening, and delivering trust through sound governance practices lie at the core of their thriving community business strategy.
Additionally, the Somali community has established Sharia-compliant financial institutions primarily aimed at assisting individuals facing financial challenges, such as school fees or medical bills, without imposing interest. The launch of the Crescent Takaful Sacco represents a significant step in institutionalizing trust within the community. Consequently, the practice of transferring capital from one individual to another is deeply rooted in this character trait.
However, there have been instances of misuse of funds sent from the Diaspora, prompting the Somali community to contemplate the creation of institutions that can further solidify trust. Their current efforts involve building a robust institutional foundation to underpin this trust. These financial institutions seek to pool resources to support essential projects, with an emphasis on transparency and accountability, aiming to address lingering doubts about the allocation of funds.
