Tuesday, August 9, 2022

Ongoro: How I got Sh. 600,000 funding to start my business

Beatrice Ongoro started her business in December 2021 after quitting her job as an insurance marketing rep in Westlands, Nairobi. “I was working for a start-up insurance agency. My salary was Sh. 20,000 per month.” She says that her salary could hardly sustain her. “I walked for long distances and asked for lifts from friends in order to save on the amount I got at the end of the month,” says the 32-year-old.

Although she was grateful for the opportunity, Beatrice decided to quit in August 2021. “After working for two and a half years, I felt that I was not being fairly remunerated. I could not continue like this,” she said. “I had saved some money and I wanted to start a business and be my own boss.”

When quitting, Beatrice was not too sure what she would fall back on. But since her family runs a business in home decor and fixtures, she knew that she would have a cushion to support her before she got back on her feet again. “I spent the first few days after quitting at the family business, wondering what business I could start.”

In September 2021, she decided to start a beauty parlour, barber shop and salon in South B, Nairobi. “My startup budget was Sh. 1 million, but I had saved Sh. 400,000 in a bank savings account,” she says. She approached her bank and pitched her case. “Although I had been saving consistently since I got my job, I was told that I could only qualify for Sh. 200,000. This was not sufficient at all,” she says.

Not one to give up, Beatrice made a bold move that not too many people would have dared. “I stepped out of that bank dejected. As I walked home, I saw another bank and wondered if they could have funded me if I had been saving with them,” she says. Boldly, she decided to walk in and talk to the credit manager. “I openly explained my situation and asked how long they would take to fund me if I joined them.”

To her surprise, Beatrice was told she could get funded with Sh. 1 million as long as she switched accounts and provided security. “I walked out, went and withdrew all my savings, and switched to the new bank.” This new bank was the KCB Bank.

By the end of October, Beatrice was asked to apply for the bank’s Micro Small and Medium Enterprise loan. “I got my parents to provide me with security, and by November, I had the Sh. 1 million capital I needed to open my business,” she says, adding that she also got a six month grace period for her business to stabilize before she could start making repayments.

“Apart from getting funding to start my business, I got a partner who could listen to what I was looking to achieve; a partner who was not only interested in the amount I saved but who also wanted to help me grow,” she says.

Sh. 100,000 to Sh. 5 million loans providing lifeline for small businesses

Beatrice is one of the many entrepreneurs who are taking advantage of highly discounted KCB Bank loans that are targeting micro and small medium enterprises in Kenya. In what has been testament to the bank’s funding of MSMEs, KCB Bank has deliberately set out to identify and support small businesses such as Beatrice’s to scale up.

“These business enterprises are the lifeblood of our economy; we are going the extra mile to ensure they are adequately financed,” said Anastacia Kimtai who is the director of retail banking at KCB. “As the leading MSME Bank in Kenya, we recognize the potential MSMEs have on the economic growth in Kenya and that is why the Bank takes a keen interest to support the sector.”

In addition to funding businesses, the bank in 2021 introduced a discounted financing facility to boost micro small and medium enterprises customers whose operations have been adversely affected by the pandemic since March 2020.

Following this reduction, micro, small and medium enterprises who were experiencing disrupted cash flows would be able to access both secured and unsecured financing for acquisition of trading assets and working capital. This would in turn help them support their business activities and preserve jobs by strengthening their resilience in the long run.

“Our KCB MSME Loan offer has been designed for our business customers in response to the current harsh economic times. We’re providing a financial cushion to help maintain liquidity for your working capital or to enable you to acquire trading assets,” KCB Bank Kenya said in a statement to Bizna Kenya.

A spot check on the MSME loans at KCB Bank shows that access to interest rates and negotiation fees have been discounted and small and medium entrepreneurs are now able to get loans of up to Sh. 5 million with repayment periods of up to 36 months.


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