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One of the  most important factors  to a new entrepreneur is the starting and working capital. Small and medium enterprises (SMEs)   undoubtedly play a critical role in the socio-economic development of our country. Before starting a business, most entrepreneurs approach lenders for financial advice and support. During the Kenya Institute of Management (KIM) membership forum on 26th September 2019, the CPF Group Managing Director Hosea Kili advised the members present not to run many businesses all at once. He however encouraged entrepreneurs to diversify with the same product or service.

Most startup SMEs require loans from banks in order to finance their operations. As an entrepreneur what questions should you expect during your visit for funding? The head of SMEs Banking at Barclays Bank, Susan Situma said that before she can issue a loan to an entrepreneur, she has to cross examine him or her.“The impact of entrepreneurship capital is stronger than that of knowledge capital. Entrepreneurial capital plays a very important role in growth of a business and consequently wealth,” said Situma. “If you really want to take your business to the next level try and get a good plan and good financing,” she added.

 Situma highlighted the reasons why she might approve or cancel an SME loan application. One of the areas of interest is by confirming that entrepreneurs are passionate about their business. She said:  “If you don’t have a good banker, you will be given what you want but if you have a good banker they shall take you through what you really need.” Passion can also be expressed by the entrepreneurs having management information on the business they are proposing to be funded. Ensuring you are a consistent entrepreneur is also a priority to a bank. She said you should be consistent, know your brand, and be clear on what you want and what you are delivering. As an entrepreneur keeping clear and consistent records shows the banker that you are serious with your job hence eligible for financing.

 Mr.Kili on the other hand   encouraged entrepreneurs to start their businesses from personal savings. He said:  “Saving is necessary to accumulate the capital needed to produce wealth. This is just as true for individuals as for nations.” There are different saving channels according to Mr. Kili. These include government securities (treasury bills and treasury bonds), unit trusts, annuities, equities and mixed and call deposit.  “The obstacle for saving includes procrastination – delaying savings or putting savings off for another time,” observed Mr. Kili.

Mrs  Mary Munyiri the chief executive officer  of Eclof  Kenya (  a microfinance institution providing financial and related non-financial services to micro and small business)  said that there have been numerous success stories of Kenyans who built their companies from the ground with  personal savings.

In conclusion as an entrepreneur before going to the bank for financial assistance make sure you can answer all these questions:

  • Who are you?
  • Is your business viable and do you have a well researched plan?
  • Do you have financial records?
  • Can the cash flow in your business be traced?
  • What will the profit go towards?
  • Do you have a plan B?
  • Is the business legal?

The answers to these questions give the finance officer confidence in your business.  By  the same token,  as  an entrepreneur, you get the  confidence that you are venturing into business the right way.



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