This article will list institutions that offer business funding in Kenya. The idea is to create an awareness of these institutions and their services for entrepreneurs or individuals who want to start a new business venture or are running an existing one.
The list is not exhaustive; however, it gives you an idea of
which institutions to look for when you start a business.
Once again, this article intends not to provide detailed
information on these institutions or convince anyone to use their services but
to show that there are institutions available if one looks hard enough.
Institutions in Kenya that offer business funding
Here is a list of institutions that offer business grants in
Kenya;
1. Crowd-sourcing Institutions
Number one on our list of institutions that offer business
funding in Kenya is Crowd-sourcing institutions.
These institutions allow individuals worldwide to donate a
small amount of money for their idea or business venture.
These institutions offer platforms where several lenders
support a startup business.
List of Crowd-Sourcing Platforms in Kenya:
- Zidisha
- Kiva
- Kickstarter
- Indiegogo
- Seedstars
2. Banks
Banks in Kenya do offer loans to individuals and businesses.
However, typically these loans come with very high-interest rates.
The good news for startup businesses or individuals who
require vast amounts of money to get their business venture off the ground is
that many banks have offered low-interest rates on their loans.
So if you are looking for startup business loans in Kenya,
banks are your go-to source for business loans in Kenya.
3. Microfinance Institutions
Many microfinance institutions in
Kenya offer business funding. These institutions always come into play when
banks are not an option. Because of the nature of your business or its
profitability.
These institutions are typically more flexible and easy to
work with than banks. However, their interest rates are also high compared to
what banks charge.
List of Microfinance Institutions:
- U&I
microfinance
- Faulu
- Imarika
- Letshego
Kenya,
- ECLOF
Kenya,
- Juhudi
kilimo
4. Youth Enterprise Development fund
The Youth Enterprise Development Fund is a state corporation
under the Ministry of Public Service, Gender and Youth Affairs.
The Fund aims to support young people through
entrepreneurship and encourage them to be job creators and not job seekers.
It provides accessible and affordable financial and business
development support services to youth keen on starting or expanding businesses.
If you are a young person and want to fund, the Youth Fund is a great
place to start since they offer various loan products.
5. Venture capital
Another great place to search for investment or business
funding is the venture capital market. However, since this is a private sector
investment, you need prior creditworthiness before the venture capitalists take
you on board.
Many entrepreneurs have used this sector to secure funding
for their businesses. And there are also many cases of failure too; so do
research and know how it works.
It is important to note that venture capitalists are likely
to be your first and only option for a private company because they will know
you.
The advantage of this type of funding is that it offers
lengthy repayment terms at low-interest rates, and the investment amount is up
to 45% less than what you would expect from a bank loan.
6. Incubators and accelerators
As part of the government’s economic policies to promote
entrepreneurship and create jobs, incubators and accelerators have been
springing up in Kenya. They are limited to Nairobi and can be found in many
large towns.
One advantage of these institutions is that they provide
mentorship, training, seed funding, and incubation services for budding
startups.
List of Incubators/accelerators:
- Nailab
- mLab
East Africa
- iHub
- Villgro
- iBiz
Africa
- Chandaria
Business Innovation and Incubation Center
- Afrilab
- LakeHub
7. Family and friends
Though not considered by many as an institution, family
& Friends can be a significant source of business funding.
Funding or investment from family and friends is the
simplest way to raise finance for your business. This is because you don’t have
to go through much hassle before finding out whether or not you will receive
the funding.
However, this form of funding may come with conditions that
might not be favorable to you.