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Questions about matatu investment.

23 Feb

!. Am a business man from Eastern Kenya;These matatus here are named Shuttle – and each makes a to and fro and makes around 4800/=per day. I prefer these shuttles more than the 14 seater, coz the 14 seater is full of stress by the police and conductors. These shuttles are well co-ordinated and you car is run on a minimum cost (e.g services, No corruption with the police, so your car loses no money in the route) and again you can run it with a fixed amount of delivery).
==That’s a lot of money, I can’t promise you that amount here in Nairobi especially town services. Here we operate with between 3.500 and 4k net. We make about 12.000 minus fuel and other expenses like salaries. You have every reason to think about investing in the shuttles; I agree with you on cutting cost with proper management, what Is basically what we as Rongai welfare are working on laying the foundations. Corruption by traffic officers is the biggest obstacle to matatu investment.
3. The shuttles here don’t have conductors coz there are stationed.
==That is another plus, passengers pay a fixed amount and mostly at stations; In our case, we need the conductor, town service jobs can’t be possible without their services.

Your quiz’s are:
1. I am caught up between buying a second hand (no so old) and buying a new one through a loan. (according to some matatus owners here; is that u cant pay the loan above that is almost 2.2 million, coz of the challenges involved nowadays.
==If you are talking about a Toyota hiace 14 seater / 11 seater shuttle, the idea of buying a new one is out of question, why; because the government stopped the licensing of 14 seaters. You can not register a new vehicle nowadays unless you buy a fleet of several vehicles as a sacco. If you can get a Toyota in good condition say from KBC—to –KBL—you can buy the vehicle from 750k to 900k.
==Buying a new matatu will mean a 29—33 seater minibus. The total cost to own a
minibus is 4.5m. Kenya Commercial Bank has a facility with General Motors- you get a form from the vehicle dealer and the bank finances the transaction on your behalf. i.e. they pay General motors and you pay back the loan according to the banks terms and conditions.
2. According to the politics in Kenya today , Do i wait the outcome or i should go ahead.
==Elections are the only obstacle that is hindering investment , but I have a lot of confidence with Kenyans that nothing out of normal will arise. It is advisable to do the research now, identify the vehicle of you choice, talk to your bank and see what they have to offer and by the mid-march we will have a clear direction as to where we are heading.
3. If i have to buy a second hand (what do and donts should i look for)
==The first thing you should not do is buy a vehicle that has been involved in a fatal accident; It’s not a myth but this vehicle don’t end up well. If possible buy a vehicle that was a shuttle not a uptown matatu. Vehicle are like young girls, the more they are exposed the more they can’t make a good wife. Shuttles spend more hours parked while waiting for passengers and this makes them the best choice when you want a car you will use for some years and still be able to get a good price when you want to change investment.
4. I.ve never done my business with a loan from any bank ) so having a loan is a challenge ,but i can face if well guided. i believe every business should run itself , so i don’t want to use my money from other sides to pay a matatu, it should cater for itself.
==To afford a matatu, you must have really worked hard to get where you are. What a loan does is get you hooked to your investment. Once you have put a certain percentage of your money in to buying something and then someone adds his money to your idea, it is scaring to imagine that you stand to loose even what you have contributed to the financer if you fail to honor the agreement. To somebody like you who know how to generate and grow monies it will largely depended on your cabability to manage the income. According to what you had mentioned above, this shuttles make 4—-4800 ksh.
5. Are new matatus registered these days.(TLB)
==Yes and no; any matatu carrying more than 25 passengers is being registered- but no new 14 seaters.
6. At how much a 5L,3L,and 7L matatu are costing these days and if you take it through loan at how much extra cost would it go for.
==A used Toyota 5L is in the market from 700k to 1.2m depending on trhe condition of the vehicle and year of registration. You can get a good 3L for about 500k and 600 most; many of this are KA—something. I don’t know how much 7L is going for but I wouldn’t recommend you to buy one as the spares have not flooded the market. It is still an expensive car to maintain.

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16 Comments

Posted by on February 23, 2013 in Matatu matters

 

Tags: , ,

16 responses to “Questions about matatu investment.

  1. jacob

    February 26, 2013 at 2:05 pm

    wawawa” man i can die.May u live to be 150 years u got ma blessings.God bless u 4 the piece of advice.
    Now i went , in the second hand market searching but i can tell u is a hell. I involved a very experienced driver of these matatu and a mechanic of the same but of being in Kitale, Eldoret and Kakamega for the last two weeks we came with no car . Reason being
    1.These accident free second hand cars are selling the same price that they were bought with 4 years ago.(kbf,Kbg,Kbk,) at around 1m to 1.4 m

    To my concluded field search advice me on this research.
    – Is it better to buy this 7L new car (matatu -they are allowed as long as you are a member of a matatu sacco) coz the ones that are selling theirs they want to buy these 7L new model)
    Thanks in Advance .Advice

     
  2. elizabeth kulobs

    August 29, 2013 at 8:06 pm

    how and where can i get shuttles?

     
    • wambururu

      August 31, 2013 at 1:45 pm

      I didn’t quite get you question. what category 9 seater or mini-bus? for a min-bus you can buy a imported Mitsubishi Rosa from most motor dealers. I’m not sure how much they cost but you can get a good bargain from a tour company. As for a Toyota Hiace you have two options, either buy a locally fully registered matatu and refurbish it. It will cost you between 800 and 850.000 Khs. or buy a straight import new model Toyota 7L 1.6—1.8M Kshs.
      There is also the Toyota Town Ace that is popular in some long distance routes.

       
    • Ali

      May 8, 2014 at 7:16 pm

      I am interested to invest in the Matatu industry and I would like to know which make/model of the mini buses (Mitsubishi, Hino, Isuzu) would be recommended for the 33 seater matatu business? I am looking at the Likoni-Kwale route, which is hilly towards Kwale.
      Also what is the cost of PSV license?

       
  3. NIÇK

    October 22, 2013 at 9:25 am

    can the new models of Toyota town ace allow a sitting capacity of 9 passenger at the back ( excluding the front seats )? and can one buy this car and use it for public transport without being in a sacco? plz help

     
    • wambururu

      October 22, 2013 at 10:23 am

      Hello Nick,

      What i would do is visit one of those Sacco that operate town ace; see how they do it and the business angle. i don’t know much about how many passengers can legally sit in the back but i doubt 9 passengers can fit. Go to their reception desk and ask all the questions, you are an investor and they are in business.
      Yes to your second question, Buy the car, register a tour and travel company and start looking for clients.

       
  4. nash

    October 28, 2013 at 11:37 am

    i dont have finance to buy a minibus i hv try to go to banks and i hv nt gotten any success.where can i get fiance to buy one pliz help i am really interested in matatus business

     
  5. Kephero

    January 5, 2014 at 5:15 am

    Vipi Mr Wambururu
    Can one still import a Nissan Caravan or Toyoya Shuttle and be given a TLB license?

     
    • wambururu

      January 12, 2014 at 11:23 am

      Yes; that is, if you want to join long distance route- meru , kericho, busia, kitui and the likes ; you will be issued with all the papers as long as you follow the requirements.

       
  6. damaris

    January 19, 2014 at 11:46 pm

    how much do 33seater make per day?im planing to get one.By damaris.

     
    • wambururu

      January 28, 2014 at 11:35 am

      depends on the route and the make/ design of the matatu. 7–8–10k.

       
  7. mwendwa

    February 4, 2014 at 6:50 pm

    for a minibus operating btw. nairobi and kitui, how many turns are possible daily? the stations are always flooded with matatus it seems the matatus just que all day

     
  8. maina

    March 12, 2014 at 2:07 pm

    hae wambururu
    thanks for ur informative blog
    my quetion is..which is the best model of a passenger vehicle should a fresh business man start with..cash and labour force being constant variables

     
  9. cornel

    April 7, 2014 at 12:43 pm

    Hi,just how long does it take to get an operating licence?

     
  10. Musyoka mwololo

    October 28, 2014 at 8:37 am

    Ilike this

     
  11. Dickens Malachi Omollo

    April 2, 2015 at 7:09 pm

    I am young entreprenure who deposits averagely 40k in my business account on monthly basis. Am in kcb. My dream is to have minibus by early next year. Do you think my bank can finance me.

     

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