one entrepreneurs’ experience; I have a business plan and have been looking for funding for over 8 months now. I have been unsuccessful because many financiers are more focused on expansion capital – only if you have been in business for 6 months and over is when you would qualify for capital
I’ll begin by saying that, apart from Enablis, I haven’t found a true venture capital firm anywhere in Nairobi. Although many firms describe themselves as ‘investment banks’, ‘development banks’, xyz Funds, or venture capitalists, for better or for worse, they absolutely do not fund arart-up companies. They like real-life balance sheets rather than projected balance sheets. is already an Enablis member and does qualify for capital, but it’s an 8-16 month long process of reviewing my business plan and then getting funding
Investeq Capital – It’s very impressive; they have offices alongside Milimani Road I think. They seemed to be genuinely interested in my proposal but they said it was too small. If I remember correctly, they fund between Kshs. 5m to 40m. They have a super-skilled management, btw.
Fusion Capital – They fund expansions; you have to have been in business for about 6 months, but I liked their customer service. I didn’t ask about their rates though.
IFC SME centre – Fund expansions. They advertise in the Tuesday newspapers, you’ve probably seen it. Met with them at their offices. Naturally they were not interested so I didn’t get past one meeting, so I don’t know their rates.
Grofin – didn’t meet with them. How they operate is buy you first sending them your proposal, they review it to see if it meets their criteria, and then they respond to you. They told me (over email) that my plan wasn’t up to their standards. It’s generally difficult to argue with such an organization because they effectively cut out your argument. They don’t even bother to meet with you, so you don’t know what it is they found that you could have responded. Another fund I personally know of like this is the APDF but that was a few years ago.
East Africa Capital Partners – They definitely give you time to defend your idea, but it has to be an ICT business. They have big interests in TEAMS and the like and invest heavily in ICT infrastructure. So up to this point they have not looked at small businesses. They are in the process of setting up what they call a ‘special purpose vehicle’ – basically an SME fund. Right idea, wrong time I guess. I’d approach them in 6-8 months if I was an entrepreneur… wait a minute, I am an entrepreneur!?
Banks – Banks were the first entities I approached with my first proposal, but that was some time back before they began lending like crazy. Basically they want you to have been banking with them for at least 6 months, which for me is out of the question. Again, they look at expansions. If he had approached me, I’d have told him we don’t do start-ups, mainly expansions, who have a few years of audited financial accounts
Youth Fund – The fund is broken into two separate funds, one for Kshs. 50,000 and under and the other for Kshs. 500,000 and over. The rules for the bigger fund are obscure. The fund is run by ‘financial intermediaries’ which mostly are banks and SACCO’s. In theory they are supposed to lend more than half a million but they don’t. I think the youth fund gets funnelled to other products of these intermediaries because they don’t mention them. You end up looking for them instead of them looking for you. Family Finance bank is the only one I’ve found that is a defined youth loan.
Related: Four other SME finance avenues suitable for ICT start-up entrepreneurs in Kenya.