Loans and microfinance

Loans are a common way to finance companies: you borrow from the investors/lenders at an agreed amount (the principal) and repay the principal and accrued interest to them after a specified period of time. Microfinance loans typically target micro to small business owners. 

• The KCB Group Kenya offers SMEs term loans, which allow the SMEs to access secure loans of up to KES 250 Million, and unsecured loans of up to 3 Million, with a flexible repayment period of up to 36 months for an unsecured loan and 60 months for secured loans. The cost of credit is competitively low as well. For inquiries and application criteria click here.
• Commercial Bank of Africa (CBA) provides SMEs with various options of bank accounts, loans, transaction solutions, cash management solutions, as well as investment solutions. Specifically on financing, they offer term loans, with solutions such as project finance, real estate development finance, mortgage finance, and asset-backed finance. Fore other types of loans and solutions offered by CBA, click here.
• The Co-Operative Bank developed MSME solutions that have enabled the bank to address specific features which support entrepreneurs to manage and grow their businesses. The solutions include MSME account packages (Bronze, Silver and Gold), mobile loans, unsecured and secured loans/overdrafts, supply chain financing, insurance solutions, payment solutions and non-Financial services (training, networking and International exposures). For detailed business solutions and loans, click here.
• Sidian Bank offers Tabibu solution that provides tailor-made financial solutions to hospitals, pharmaceutical companies, pharmacies, chemists and medical equipment suppliers. In addition, small, medium and mature loans are available for different criteria. Click here for details.
• The Central Bank of Kenya offers a List of Member Firms of The Nairobi Securities Exchange. Particularly, Dyer & Blair Investment Bank Ltd, have specific services for SMEs.

Crowdfunding

Crowdfunding allows entrepreneurs to raise (usually) small amounts of capital from a large group of individuals via the Internet to finance their business venture. In Kenya, the following crowd funding opportunities exist:

• One Percent Club is a Dutch based global crowd-funding platform. Their partnership with the Cheetah Fund on matching funds offers a great deal to entrepreneurs. If pioneers manage to crowdfund at least 30 percent of their target amount via 1% Club within 30 days, the Cheetah Fund then grants them the remaining amount, supporting entrepreneurs with seed money to kick-start or boost their world changing projects.
• M-Changa provides security and communication and record keeping capabilities for unprecedented end-to-end transparency. M-Changa integrates mobile money and credit card payments, SMS, email, social networks and geo location.
• Crowd Agritech is a Kenya-based crowd funding platform, offering a peer to peer, individuals sponsoring farms model for farmers to improve their farm projects as well as sustainability, improving the farmers’ welfare.
• VC4A is an African start-up community, where entrepreneurs can use to announce their new fundraising round, by adding a pitch and video, uploading fundraising documents and listing team members. The fundraising can be seen by VC4A network of more than 1.000 early stage investors, who focused on startups in developing countries. See how you can benefit as an entrepreneur, click here.
• For recommendations by Digital Trends for the best crowdfunding sites in 2019, click here. Note: The campaigns on these platform may require you or your partner to be able to open an account in certain countries in order to receive funds.

For further information on crowdfunding, visit this post on the Ye! Blog – What is Crowdfunding?

Angel investments

Angel investments are typically the earliest equity investment in startup companies. Angel investors are usually wealthy individuals that come together in investor networks.

• The TBL Mirror Fund is a private Equity Fund for East African and Nigerian Small and Medium Enterprises (SMEs) targeting various high growth sectors and deals where value can be added through the know-how and involvement of the Fund managers and its investors. The Fund has a general industry focus, with a particular good track record of supporting ventures in ICT, Healthcare, and Consumer Goods.
• Jacana is a pan-African private equity firm that invests in SMEs, and builds on a unique model that combines African professionals who understand their local markets and can provide close support to portfolio companies, with highly-experienced international private equity veterans (our “Investment Directors”) who commit their time and expertise on a pro-bono basis.
• Adlevo Capital makes equity and equity-linked investments in rapidly growing private companies, and seeks to invest in companies that possess the following characteristics: strong management team, large market opportunity, consumer driven growth, and positive impact
• Kenya Angel Investors, a list of investors reside or interested in Kenya.

Venture capital

Venture capital refers to money invested in a project in which there is a substantial element at risk, typically a new or expanding business.

• Safaricom Spark Venture Fund invests in start-ups in Kenya at late seed to early growth stage that use mobile technology as an enabler in one of the following categories: mobile commerce/payments, youth, media content and info-tainment, SME and cloud solutions, data and messaging. The Fund will be provided for a minority equity stake or as convertible debt to selected start-ups with an average ticket ranging between KES 6 Million – KES 22 Million. Click here for specific criteria.
• Fanisi Venture Capital Fund makes direct investments in businesses with potential for substantial growth, with emphasis on: agri-business, healthcare, retail & consumer, and education. They focus principally on companies that are post revenue with profits or a clear path towards profitability.

Government schemes

• Stawisha SME Mashinani, to be rolled out in June 2020, this scheme intends to be a one-stop-shop solution where SMEs receive affordable support and benefit from business advisory services, asset financing, working capital, project finance, and grants. Targeting sectors of the scheme include agriculture, food processors, textiles and apparels, furniture and metal fabrication, medical facilities, pharmaceuticals, and building and construction companies.

Duly registered under the Companies Act of Kenya and with a place of business in Nairobi, AGF (African Guarantee Fund) was established by the Government of Denmark, Spain, and the African Development Bank (AFDB), with a mandate of facilitating access to finance for SMEs to enable them to fully play their role of driving the growth of African economies. Depending on the coverage and limit of loans/equity, the available products include loan individual guarantee, loan portfolio guarantee, bank fundraising guarantee, and equity guarantee. For each product, click here.