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Mobile Loan Firms To Set Up Real-Time Credit Sharing System To Tame Defaulters

At the moment, over 400,000 people have been blacklisted for defaulting on loans of Sh200 and below.

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In a bid to tame mobile loan defaulting from one mobile lender to another, twelve firms under the Digital Lenders Association of Kenya (DLAK) are working on a real-time Credit Information Sharing System (CISS) to allow members access real time access to customers borrowing history.

“The real-time credit information system will help us see just how much indebted a customer is, and we hope other lenders to contribute the information,” says Tala East Africa Country Manager Mr. Ivan Mbowa .

Currently, mobile lending firms in the Association have been withholding credit information about their clients who often proceed to secure loans from other lenders after defaulting with multiple others.

As reported by Capital Business, Mr. Mbowa’s sentiments come against the backdrop of a study conducted by the Central Bank of Kenya (CBK) showing that 16.6 percent of digital borrowers take up a loan to pay for another, entangling them in a vicious cycle.

At the moment, over 400,000 people have been blacklisted for defaulting on loans of Sh200 and below.

According to a directive issued by the Central Bank, digital lenders have been asked to operate as normal loans where a customer will be considered to have defaulted after six months.

The directive also requires that all financial institutions must forward customers’ information to CRB every day to ensure that information is up to date and those who have resumed servicing their facilities are not listed as defaulters. Capital Business added to its reporting.

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Funding and Raising Capital

100 Women To Win Funding of Up to $85,000 from Invest2Impact Competition

The competition is set to start on July 11 and end on November 13.

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100 women entrepreneurs from Kenya, Uganda, Tanzania, Rwanda and Ethiopia are set to get funding to the tune of up to $85,000 from a funding competition dubbed Invest2Impact.

Invest2Impact, an initiative from Graça Machel Trust in partnership with FinDev Canada and other finance institutions from the U.K., will see women from each of the participating countries compete for the fund. Only 20 women will be selected from each country.

The initiative was launched on Thursday at an event in Nairobi, Kenya where Graça Machel has visited tghe country to amplify women-led businesses.

Speaking during the event, Graca noted that the decision to focus on women entrepreneurs was made because of the significant contribution that they make to their economies.

“Empower a woman and a whole community will thrive, empowering women benefits everyone and is essential for communities to thrive. Research shows that increasing women’s involvement leads to improved financial management and more sustainable, thriving communities,” she said.

When women-led enterprises are empowered to achieve their full growth potential, they contribute to more job creation, enhanced regional trade, and spur more activity among budding entrepreneurs.

“Through our numerous engagements with women across the continent at the GraçaMachel Trust, we have witnessed the rise of African women who are not content running businesses for subsistence purposes only.

“Some are venturing into sectors that are traditionally male-dominated where their numbers are still small; some are bent on improving their technical knowledge and capacity to tackle even greater challenges impacting the business landscape; and some are engaging in regional trade to maximise their growth potential. The female segment cannot be generalised as ‘niche’ or ‘predictable’,” Mrs. Machel said.

Businesses whose focus are aligned with the UN Sustainable Development Goals; seeking to reduce poverty, increase access to health and education services, reduce hunger and increase food security, promote gender equity, create decent working conditions for their employees and spur economic growth, have a greater chance of being considered for the funding.

Participating women will also benefit with business development services, mentorship programs, new networks and business visibility through partnerships.

To qualify, a business must be led by a woman or women owning at least half of the share-holding and have assets or revenues in excess of $50,000 (Sh5 million). The business must also have been in operation for at least three years and a minimum of five employees.

The Invest2Impact will categorize participants into four “tracks”: 2Xcelerate, 2Xcrowd, 2Xcapital and 2Xcatalyse.

25 finalists will compete for cash prizes of Ksh.8,749,900 ($85,000), recognition at a gala winner’s event and participation in the Invest2Impact funding readiness program.

For the 2Xcrowd track, 25 businesses will receive customized, tailored support and mentorship to implement an Africa or global crowdfunding strategy.

2Xcapital will see 25 applicants who are selected from the Invest2Impact participants benefit from access to funding programs. It is targeting smaller businesses that seek funding less than Ksh.308,700,000 ($3million).

In the final category, 2Xcatalyse, 25 female entrepreneurs will be selected to attend a major international expo, conference or event in their industry sector with sponsored travel, attendance fees and promotional material.

The Invest2Impact competition which will be on an online application portal will open to the public on Monday July 18 and will remain open to applicants for two months.

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Business

Youth and Women to get Loans at 6% Interest Under the new Biashara Fund

A woman, youth or person with a disability shall be eligible to apply for a loan for business purposes if they are in a registered group where at least 70 per cent of the members are aged between 18 and 35 years.

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The Treasury has submitted regulations meant to guide its operations of the Sh 2 bilion biashara fund to the National Assembly for ratification.

The fund will see Women, youth and small business owners get loans from the State at six percent interest per. At six percent, the groups will borrow at half the prevailing commercial lending rate of 13 percent — a cap set by the Central Bank.

The Treasury revealed terms of the loan through Biashara Kenya Fund regulations.

Money borrowed from Biashara Fund will be used for business only, with applicants expected to prove that they have established businesses.

The Fund will also lend some of the money to intermediaries such as commercial banks and saccos, who will, in turn, lend to these special groups at a maximum rate of 10 per cent.

Biashara Fund will lend money to commercial banks at an annual interest rate of three percent.

Intermediaries who provide counterpart funding at least equivalent to the amount advanced by the Fund will, however, repay a minimum interest of one percent.

The regulations also add that not more than 25 per cent of the fund’s cash will be lent to intermediaries.

The rules cap the maximum amount that the banks or financial intermediaries can advance a single borrower at Sh3 million.

Upion approval, the fund will lead to the merger of Uwezo Fund, Youth Enterprise Development Fund (YEF) and Women Enterprise Fund (WEF). The three funds had been created to empower women and the youth in entrepreneurship but have not had the intended impacts due to lack of proper coordination.

A woman, youth or person with a disability shall be eligible to apply for a loan for business purposes if they are in a registered group where at least 70 per cent of the members are aged between 18 and 35 years.

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Finance

Money Mindset That Is Holding You From Starting A Business

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Never be deceived that business is just started without capital. Practically a business needs finance and that is why capital is always a necessity. However, this can never be a stumbling block to starting your business. What you need most is that business idea and the execution follows afterwards.

The plan you have in your mind can turn into a multi-million business. This happens the moment you are aggressive and ready to conquer the impossibilities in life. All the successful businesses thriving today started with humble beginnings. I have never heard of a business mogul who said that his business started today and was trading with an ISO the day after. Patience has been a key attribute to success.

Having a brilliant idea you will never lack an investor. The business men you see living lavishly tend to seek for ideas that will make their businesses grow. The moment you will unchain your mind from the concept of having enough money to start business that will be the beginning of your success.

The youths are the best people in targeting the entrepreneurial sector; this is because the future belongs to them. Money will never be enough to mankind. This concept needs to sink in you and sprout out the idea that you need to start with what you have. Money may be a necessity in starting the business but the first can in business is through marketing your idea to the potential buyers. That idea you feel can generate profit can be turned to be the next ‘amazon’ or ‘apple’ business on the world. If you ask Donald Trump how he built his brand in the market, he will tell you the small dollars he was offered by his dad then he dived into business.

That’s the way to go in the cooperate world. Use what you have at had to make sure you achieve what you want in life. Failure is the fear of many business oriented minds. Just you know, failure is a positive factor in business. The concepts of failing as much as you are in business one has to ready to embrace it. Failure in business means that you are heading somewhere and there are things that need to be addressed. It shows you the way to go needs to be the other way and not the way you are used to be doing things.

Nobody prepares to fail but we must know how to tackle it. The more we fail and start again the more we move closer to our goals. This not only applies to business alone but also in real life. Never be discouraged by failure take it as a challenge and handle it head on. It will be there but remember it is not there to stay. It is part of success. The CEO of Optiven Group Mr George Wachiuri in a past interview with Inversk magazine attributed his success to how many times he had failed.

Most of the people who want to be millionaires have the fear of failing. They have never look at the other positive side of failure. Money can never be the stumbling block to deny you the chance of being the next Bill Gates.  Market your idea since it is the only money you have in mind. I happened to participate in a World Bank blog and the person who won it was a gentleman namely Jeremy Riro who had a brilliant. Just from humble beginnings he was rising with the idea of Agribusiness to be inculcated in our youths today in Africa. If Riro let the opportunity slip saying he had no money word bank would never have his idea.

His idea is yet to be executed and the employment is going to be created to many jobless youths. Marketing our idea with a will always remains an effective way rather than waiting for that day we will have money to execute the plan. That idea you have kept for long awake it and continue with the adventure of making it a better business idea. If you don’t have any well you have not yet started living because the moment you start dreaming is the day you started living.    

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