The new year comes with new expectation and, as we would all like, growth. There are those of you who have resolutions to start a new business while those of you already in business are looking for ways to take those businesses to the next level. As a business person, where do you turn to, to grow your business?
Through generations, banks have facilitated access to credit for entrepreneurs. Banks have been giving out loans to walk-in customers and. more-so lately, digitally thanks to the mobile phone revolution. Family Bank’s PesaPap, for example, allows both customers and non-customers to access credit. Besides through our branch network, entrepreneurs have access to up to Sh 500,000 credit when they walk into any of our branches.
Business financing is the engine that powers business growth. However, you and your business need to be creditworthy for you to benefit from these offerings. Luckily, banks have innovatively created solutions and offered platforms that can help you and your business be credit-ready.
There is an opportunity for entrepreneurs to take advantage of training provided by the financial sector through business clubs. These clubs provide training in various business skills such as bookkeeping, human resource, marketing, business management, customer care, amongst others. Members of business clubs can take advantage of networking sessions, business matching forums, business trips and business advisory workshops, in addition, to express services at the bank counters and discounted rates of insurance products. These will equip businesses and make their operations efficient with access to appropriate skills as well as guidance and mentor-ship.
Kenya Bureau of Statistics (KBS) data shows that in 2016, 40% of all SME owners had commercial applications for their mobile phones and that while only 29% of SMEs were registered pay bill/till users, 49.3% had mobile money and mPOS infrastructure in place. SMEs are capable of harnessing technology to increase access to their products and in turn, grow their footprint and turnover. Social media has opened up business opportunities to this sector and adopting innovative financial technology solutions allows us to tap into an increasingly mobile-savvy consumer base.
An entrepreneur should also continually be on the lookout for solutions to market problems, develop high value-added products of superior quality not just to gain access to credit locally, but to be able to compete globally.
In today’s digitally-driven lifestyle, the importance of having a good credit score cannot be understated. An entrepreneur should be able to plan his or her credit. Know when to borrow and stick to the plan. Never borrow more than you need and can repay. Estimate your budget and spending to ensure timely payments of the loan. It is important to avoid late payments and avoid long outstanding bills.
As a business grows, the need to formalize its existence is necessary and unavoidable. It is therefore important that your business abides by the necessary statutory obligations such as having a KRA Pin Certificate and being tax compliant, having a business registration certificate, having a certificate of registration for the limited companies among other requirements. Abiding by legal requirements will enable businesses to have a smooth engagement when they need to access credit from financial institutions.
It is also vital for an entrepreneur to have a personal journey with their banker for financial advice, have someone walk the journey with you and continually evaluate your business and guide your financial journey.
Rebecca Mbithi, Chief Executive Officer
Family Bank Ltd.