Category Archives: entrepreneurship

Who Funds ICT Start-Up’s?

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.

Scangroup sellout, new bank?

Scangroup takeover WPP acquires effective control over Scangroup which was listed on the NSE in 2006, by buying 27.5% of the company, but not taking over or de-listing. They also have pre-emptive rights over a chunk of CEO Bharat Thakrar (and largest shareholder) stake when his lock-up period expires in 2011. Aly Khan (Rich.co.ke) points out that the slumping NSE offers cheap company shareholding buy opportunities e.g Scangroup and Unilever Tea (going private)

More Libya: 2010 may see another bank to Kenya this time Libyan / Ugandan Tropical bank. Does Kenya need another bank really? And $19 million share capital won’t go very far these days.

Entrepreneur Opportunity: The 2008 Pioneers of Prosperity Africa Awards rewards six business leaders of Africa who serve as role models to Africa’s aspiring entrepreneurs and demonstrate business excellence, innovation, and profitability. Submissions will be accepted from Botswana, Cameroon, Cote d’Ivoire, Ghana, Kenya, Namibia, Nigeria, Rwanda, South Africa and Uganda and a total of $350,000 will be awarded to the winners. D/L 31 August 2008.

Rant: Change the Channel

Next Friday, we are having a talk on AIDS – again! This may be the third this year, as there’s one every quarter. That’s because the company has committed (and arranged) for employees to receive these talks and the Ministry of Health can afford to send people out to give such talks. Or there’s a there’s a huge donor funding for HIV programs that the government has ample capacity to spend

I am not diminishing the impact, significance, or message about HIV but what about malaria? I’m sure it causes more deaths than HIV. It’s not just expectant or new mother who need lessons in malaria. What about cancer – ok its breast cancer awareness month? Cholesterol, high blood pressure & hypertension, pneumonia, and other diseases that also wipe out thousands of young people? Cirrhosis and the dangers of drunk driving! Any why it always about VCT’s not full medical checks – for cancer, high blood pressure etc? The kind of stuff people use Capital FM and other radio stations to promote new hospitals & equipment.

This rant should be directed at the personnel manager, but he’ll only come up with programs that fund themselves so we’ll continue to hear about HIV since that is FREE and funded.

I’d like to have more workplace talks that address overall health problems, beyond HIV, or assuming we are all healthy how about some internal uplifment though a fulfilling enlightening talk on money? – advice on investments, real estate, small business, opportunities, and entrepreneurship.

Isn’t there government funding or a donor package for that? Or is that left to AID workers in rural areas only?

The Story of House of Manji Biscuits

Chatting with Hash at TED this morning about entrepreneurship and I got to talking about a book I had recently read. Before long, we agreed that it was a good story that would be worth repeating here this week. Kumeckucha [Blog] had posted on this a while ago)

A few weeks ago, I had read the autobiography of the late Mandatally Manji, an Asian-Kenyan who founded House of Manji which he built into the largest regional biscuit company.

He was encouraged by his family to put his life story together and it’s a fascinating story for any budding entrepreneur to read on. He details how;

  • From being a clerk transporting commodities around Central Kenya he came up with his plan to start a bakery.
  • After hard work and sweat many years later, he achieved his dream when through a partnership he was able to buy and run a bakery with a perfect location and healthy customer base in Nairobi.
  • How he chose to walk away from the bakery in frustration at his deadweight partner who contributed little to the success of the bakery.
  • Having to start all over again with even less, as his former partner was slow in paying him for his shares.
  • Dealing with macroeconomic problems – and having to produce biscuits even as basics commodities like sugar and wheat were rationed and diverted to the war (WWII) effort.
  • Dealing with discriminatory/political barriers – and winning customers and contracts away from European bakeries through unmatched service and delivery.
  • Ingenuity to keep producing bread and biscuits by observing and experimenting. This he did by adopting the cooking habits of his employees who used grains not known (or rationed) by the Colonial Government. His competitors accused him of sourcing from the black market as they could not imagine how his bakery was able to keep producing.

It’s a great book that’s less than 200 pages long, but very hard to find.

More:
– Earlier post on Manji by Kumeckucha.
– Wikipedia entry
The book can found at Amazon (though pricey)

Woman of the Year

Eve Magazine has put an advert out for their Woman of the Year award and has invited the public to submit names of women of distinction for consideration. In 2005, it appears that it will be a slam-dunk for Wangari Maathai. However, I beg to differ. Wangari was awarded in recognition of her lifetime of work fighting for the environment. But as an MP and Minister, she has not much done recently. She should have been honoured with the Nobel Prize in the early to mid-nineties when she single-handedly saved Uhuru Park and later saved Karura Forest from destruction. Awarding her then would have been much more significant, and energized the Nation the way it did for Myanmar (Burma) in 1991 when Aung San Suu Kyi was awarded for her non-violent struggle for democracy and human rights. In 2004 awarding Wangari appears to be an afterthought.

For sheer courage in the last year, Njeeri Wa Ngugi must be considered – for bringing her husband back from exile, and for her strength after their journey took a horrifying turn. She went public with her story, against all advice that she remain silent, and later identified her attackers and returned from America to testify and pursue a case against them.

But my nominee is Gladwell Otieno of Transparency International. At a time when members of the civic society have been co-opted into government and become willing participants in the NARC, she single-handedly came out and shamed the dozen government anti-graft bodies with her singular crusade against corruption, while counter-checking all moves to silence her. The government has recognized the futility of fighting a woman, and has therefore picked women to battle her – PS Dorothy Angote and First Lady Lucy Kibaki. You can e-mail your suggestions to Eve magazine.