Five Easy Ways to Finance Your Business

With the scarcity of jobs, the option of starting a business is the only if not the best option left. One question that most people are left grappling with is how they are going to raise capital for this to start up. A while back, it was close to impossible accessing money from financial institutions. However, that’s not the case anymore. Governments in the world have come up with ways to help finance startups. Consequently, this has made it easy for women, youth, and people disability to turn their skills into thriving businesses. Here are five simple ways to access finance for your business in Kenya today.

1. The Youth Enterprise Fund

The Youth Enterprise Fund is a program initiated by the government, under the Ministry of Public Service Gender and Youth Affairs. Here the youth can apply for funding of their startups. However, there are steps to take before you qualify for the loans.

Requirements

For you to qualify, you must be:

· Aged between 18–35 years of age.

· Be a member of a registered youth group.

· The group should have a minimum of 5- 15 members.

Registered at the department of social services or the registrar of societies. There are different loan packages for different business needs. Therefore, It’s good to check out the Youth enterprise fund website for more information.

2. Uwezo Fund

Additionally, we have the Uwezo Fund, which is among the main projects the government initiated for vision 2030. The fund particularly aims to help women, youth, and people with disabilities fund their business ideas.

Requirements

Just like the Youth fund, you will be required to be;

· In a registered group of 5–15 members.

· Be a woman, youth, or a person with a disability.

Importantly, this loan has a grace period of up to six months before repayment starts. Check their website for the loan application process.

3. Chama

An additional way to raise capital for your business is by joining or forming a Chama. A Chama is a term used to refer to a group of individuals who come together to contribute money to help each other or fund projects that bring them income. Every month or week, an individual gets a certain amount of money from the members, which they can use to open a business. On the other hand, the Chama can decide to make contributions every month and advance loans to its members at a small interest. Despite these benefits, most of these groups have not been successful due to unfaithfulness. It’s the best and easiest way to save for your startup.

Requirements

Some of the advantages are:

· No Registration fee is necessary though, in some cases, a small amount is charged for one to join.

· The group can have up to 100 members or more.

· Be 18 years and above.

· Be able to contribute the minimum amount required of every member at every meeting.

4. Retained Profits

Maybe from the Uwezo fund, Youth fund, or the Chama, you’ve been able to start your business. It’s wise to plow back your profits to expand your business. For example, you invest Ksh 25, 000 in the beauty business, and then you make Ksh 50, 000 in the first month of trading. That means that you’ve made an extra Ksh 25,000. You can decide to inject back Ksh 20,000 to expand your business. With self-discipline, it’s the easiest way to raise all the capital you need for your dream business. At this juncture, it’s good to note that this can work best if you don’t depend on the trade for your daily needs. Try to have another source of income until the business is stable.

5. Sacco

Investing in a Sacco is another way you can raise capital. Most of them give loans depending on the amount you have saved. In most cases, they lend up to three times your savings. However, recently, there have been cases of Sacco crushing, and hence, many Kenyans losing their money. Despite this negative side of it, Sacco remains one of the best options in money lending institutions in Kenya. Here is why;

· They are easy to join.

· They have few and manageable requirements for one to qualify for a loan.

· Their interest rates are meager compared to other financial institutions. For example, most of them charge an interest rate of 1%.

· As long as you have an ID, you can join.

So what’s stopping you? Look for the best Sacco that suits your needs, apply to join, and start saving.

Conclusion

To sum up, this is just but a few of the many ways you can raise funds for your business. Additionally, you can get loans from friends, family, shylocks, and mobile money lenders, for example, Tala and Branch. Also, Banks have loosened on their rules for one to qualify for funding. Therefore, you have no reason to live in poverty. Go out there, do your research, form groups, and explore the options. Armed with the money, you can turn your dream into a reality and hence, contribute to a stable economy.