Using student loan to start a business

Tuesday May 21 2019


By Mosenda Jacob

Starting a business at university is one of the hardest things that most students will do, but for Mr Langaripo Lukumay, it was also the best time in history for him to set up a business that is today bearing fruits. 

Mr Lukumay, 32, a former St. Augustine University of Tanzania (SAUT) student, graduated in 2015 with a bachelor of arts with education, majoring in History and Kiswahili. Speaking to Success magazine, he revealed that it took him self-denial and sacrifice to have his business succeeding while being a student in a challenging environment – at university.

He says that at campus there is the gift of time, and research facilities on your side and it is even more interesting and advantageous if you are a loan beneficiary like he was.

Before he could venture into his first business, Lukumay says that he took time reading and searching for biographies of successful entrepreneurs both local and international, as well as following up on The Citizen’s pull out magazine (Success) to get his entrepreneurial guns shaped up.

“Bearing in mind that I was from a very poor Maasai background and was the first child from our family to join the university, I decided to choose a different, most likely underrated life in campus – a  life of self-denial and deprivation, so that I could achieve the best for the sake of my family’s history,” he said.

Receiving at least Sh900,500 (equivalent to 80 per cent of the total amount a student can receive from Higher Education Students Loans Board (HESLB) worth fees and accommodation per term,  Mr Lukumay took a step from what he had learnt to balance the cash, by paying a small amount as tuition fees, some as accommodation and saving the remaining for investment.


After one year of saving, (during his first academic year (2012/2013), the amount saved had reached to at least Sh1 million. “At this time, I started thinking about any business opportunity around campus, which I planned to start in my next academic year 2013/2014,” he said.

During the long holiday, towards his second academic year, he preferred to remain around campus than going home, so that he could do a little research on what and where to establish his small business out of the cash he had saved.

“At this time, many people discouraged me. Some said that the business may fail and make it difficult for me to clear the tuition fees’ debt. But I decided to ignore them, and even looked for new peers, consulted lecturers from the entrepreneurial department, where I got little advice and encouragement,” said Lukumay.

I took some of the saved amount and purchased a laptop to help me work on my class assignments because I never wanted the venture I had in mind to affect my academic endeavours,” he explained.

Mr Lukumay never stopped saving little amount in every sent he could get as loan, this, within one and a half year increased his savings to Sh2.2 million, and was ready to execute his business idea.

In his second year, he sold his laptop because it had a small storage capacity and replaced it with a bigger one and used the remaining amount of at least Sh1.6 million to purchase a motorcycle which operated as ‘bodaboda’ in the campus premises earning him Sh10,000 to Sh15,000 per day.


“Within seven months of my bodaboda operation, I had a total of Sh2.7 million, meaning I had a profit of more than a million. At this time, I started a lending business to my fellow students who returned the loan with a 20 per cent interest,” he adds, “The idea of lending came after having observed that most students became broke after squandering their school loan, thus creating an opportunity for me to offer them a loan that’ll help them survive in campus. A service that is active to date.”

Bearing in mind that he was soon going to graduate, Lukumay kept on with his saving initiative and the bodaboda business.

After graduation

The idea of unemployment never stopped clicking in Lukumay’s mind, he knew very well that life could be different and in this case difficult after his graduation, so he kept on thinking on how he could expand his business to sustain him while off-campus.

Immediately after his graduation in 2015, having cleared all the fees, he tried to apply for jobs in various private and public schools, given the government was not clear about whether it was going to employ potential graduates that soon or not, but his efforts never bore any fruits.

“In 2016, I started believing in the idea of self-employment. I measured how my small business was helping me and my struggling family back home, and decided to fully focus on it so that it may expand,” he said.

In mid-2016, one year after his graduation, Lukumay decided to withdraw all his savings amounting to almost Sh4 million and purchased a multi-purpose printer and one desk-top computer. Having his personal computer (laptop), he employed one secretary and started offering stationary services including internet to students at the campus’ main street-market ‘Nyamalango’.

“After a few months, with high demand from students who always wanted stationary services, this new business grew to an extent where I had to employ other two people who helped me in handling the business. As profit increased, I expanded the business by opening another stationery at another nearby street-market of Malimbe,” he said.

Later, Lukumay had to purchase another motorbike which he used to reach to his customers especially those who called him for loans and also used it as a bodaboda.

After two months of his two stationery operation, Lukumay further strengthened his business by purchasing a spiral-binding machine at Sh300,000 in a bid to improve his services.

“I do not regret for having denied myself spending money during the years of study in campus. Today, my stationery services earn me a monthly profit of at least Sh1.8 million. In fact, in the year 2018 alone, I had a net profit Sh15 million, which I use plus other benefits to expand my business,” he said, with a smile on his face.

“This is how I established myself from scratch, to what I am and continuing to be. Today my fellow classmates are suffering from unemployment, three of them are now my employees and one is operating one of my bodabodas. My parents are happy, I can now provide for my young brothers and sisters with school fees whenever it’s needed.”

“In 2020, I will start to clear my HESLB debt, I don't want to wait for employment in order to clear it yet I can do it now. I am so proud of myself,” says Lukumay.

Massage to other HESLB beneficiaries

Currently married to one wife with two kids, and having started building a modern house in his one acre plot in Mwanza, Lukumay believes that all loan beneficiaries can do even more than what he did if only they avoid unnecessary activities that normally consume lots of money while in campus.

“I basically knew that even if HESLB could have given me over Sh5 million, I was to pay it back, whether employed by the government or self-employed. This is what most loan beneficiaries don’t remember whenever the ‘boom’ is poured in their bank accounts.

Having changed my life, the money can as well change their lives totally and help the country in mitigating unemployment crisis. The challenge is that most of us youth do not focus on days after campus, which is why many regret failing to plan well their boom back in campus,” he said, further adding; “what most campus students should be aware of, is that it takes risk, hard graft, and vision for one to achieve his or her first milestone.”

“From spending my term loan - when it should have been used for rent - missing three years of student social activities, and then continuing to work on a business when many people were telling me it was a ‘waste of time’. Making the right choices as a university student is a move that requires wisdom as well as sacrifice,” he said.