In the dynamic business landscape of Kenya, small enterprises play a crucial role in driving economic
growth and job creation. However, accessing the necessary funding to fuel expansion can be a
challenging journey for many small business owners. In this blog, we will explore practical strategies and
avenues available for small businesses in Kenya to access debt and unlock their full potential.
- Understand Your Financing Needs: Before seeking debt, it’s essential to have a clear
understanding of your business’s financing needs. Evaluate the purpose of the funds—whether
it’s for working capital, equipment purchase, expansion, or any other specific requirement.
Having a detailed business plan will not only help you identify your needs but also showcase
your commitment and vision to potential lenders. - Bank Regularly-Banks and lenders use the banking done in a year to determine how much
money you will qualify for. You can increase your chances of getting an approval by ensuring
that you deposit your daily transactions in your account banking. You should also use the Bank
Paybill numbers when selling so that the money goes directly to your account. - Keep good records of your business-Banks and lenders analyze your books to qualify you for
loans. Practice proper book keeping by recording all your sales and expenses. You can use the
physical cash books sold at the book shops or the free online book keeping applications like
Wave app, Tenakata etc - Have a good Repayment History: The Banks/ lenders will want to see a good credit history, that
you have been paying your loans well. Being Negatively Listed with the Credit Reference
Bureaus (CRBs), will limit your chances of getting an approval. - Borrow from few Financiers- Try and consolidate all your business financial needs with one or
two Banks or lenders. This is because they will be able to give you a wholesome solution for
your working capital needs. - Pay your taxes and Licenses- Be compliant with the county laws and Government laws
- Have a profitable business- Ensure that you are able to differentiate between revenues and
profits . i.e. You need to know how much you have made as profit which you can use to finance
your living expenses or put back in business and money that is for working capital i.e. money
that is for stock.
Accessing debt for small businesses in Kenya requires a proactive and strategic approach.
By understanding the available options and building strong financial foundations, small business
owners can pave the way for sustainable growth and contribute significantly to the nation’s
economic development. The journey may have its challenges, but with determination and the right
resources, small businesses can thrive and take their enterprises to new heights.
