Where to Get a Loan for your Business in Kenya

Where to Get a Loan for your Business in Kenya

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.

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