On the 26th June 2019, business mogul Thomson Mpinganjira made an inspiring speech at a conference in Lilongwe, Malawi, narrating the hurdles he encountered in establishing FDH Financial Holdings, one of the fastest growing business empires in Malawi.
The hall fell silent as Malawi’s corporate gurus listened intently to Dr Mpinganjira’s story.
Dr Mpinganjira talked of the early beginnings of his ventures, which include FDH Bank, FDH Money Bureau, and First Discount House. He identified challenges he encountered in establishing his companies, explaining how he overcame them.
Dr Thomson Mpinganjira was Malawi’s first stockbroker, serving as Stockbrokers Malawi Limited’s CEO until 2000. He explained that it was through his involvement with the Malawian Stock Exchange that he realised the vast opportunities available in his home country’s financial services industry.
In 1999, while still in full time employment with Stockbrokers Malawi, he started the process of establishing a discount house, following talks with his brother Dr Peter Mpinganjira.
Thomson Mpinganjira explained to the audience that the minimum capital requirement for establishing a discount house in Malawi was US$1.5 million. He invited four friends to join the venture, pooling resources to raise the required capital, as well as approaching the Malawi Development Corporation as an anchor institutional investor in First Discount House.
Dr Peter Mpinganjira formulated a comprehensive business proposal in order to attract Malawi Development Corporation and other institutional investors. Dr Thomson Mpinganjira registered First Discount House on the 6th March 2000. His next hurdle was obtaining the necessary licensing from the Reserve Bank of Malawi.
The venture suffered a significant setback, however, when three of the four friends pulled out of the idea. By September 2000, Thomson Mpinganjira found himself working alone.
Submitting the license application in November 2000, he signed over 55% of the shareholding to Malawi Development Corporation, retaining 45%. Since the original plan was to assign just 25% to Malawi Development Corporation, this represented a significant setback.
After protracted negotiations, First Discount House’s license application was rejected on the 5th April 2001, making it impossible for Malawi Development Corporation to back the venture. Dr Mpinganjira explained to the audience that he was devastated at this point but remembers a General Manager at RBM telling him not to give up, telling him to look outside of Malawi.
Despite having whittled through considerable funds, with grave concerns over the business’s future, Dr Thomson Mpinganjira continued his search for investors, approaching Old Mutual Malawi and Press Corporation plc, before the venture was finally rescued by some of his Stock Exchange contacts.
Dr Mpinganjira’s story underlines the importance of networking. With the financial support of Old Mutual and Press Corporation, he did eventually get the venture off the ground, and, despite numerous hurdles along the way, First Discount House grew to become highly successful. Today it forms part of the FDH Financial Holdings group of companies, having amassed over 1,000 individual and corporate clients, with a trading book worth approximately MK21 billion.