3 Alternative Financing Options for Kenyan businesses

3 Alternative Financing Options for Kenyan businesses

Securing funding can be tricky for businesses in Kenya. Banks are not always willing to lend to young companies with little to no revenue track record or credit history. While many international financing options are difficult to access for African companies. Fortunately, there are several new alternative financing options available to Kenyan start-ups and small businesses. Most, that not many entrepreneurs are actually aware of.

1. Africa-focused Crowdfunding

Crowdfunding is a relatively new way of financing that isn’t as widespread in Africa yet as it is in the US, the UK or in Europe. However, as a start-up in Kenya you can apply for crowdfunding through the Africa-centric crowdfunding platform LelapaFund.

Lelapa Fund is a niche crowd investment platform dedicated to African companies. For international investors who are looking for new smart ways to invest money, investing in African start-ups is very appealing. There is enough investor demand on LelapaFund’s platform to meet the funding needs of most start-ups that are allowed to list. If your start-up meets the platform’s requirements and you are happy to give equity to a pool of individual investors, then this is an excellent opportunity for your start-up to receive funding.

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2. Bitcoin-based small business loans

BitBond is the first global peer-to-peer lender that leverages the world’s first digital currency bitcoin. BitBond allows borrowers around the globe to apply for a bitcoin-based small business loan regardless of their location. The fact that bitcoin in Africa isn’t really a thing yet, doesn’t prevent local businesses from applying for loans on BitBond. Loans can be received in the local currency equivalent to the bitcoin amount that is being borrowed.

Online merchants are the favoured borrowers on BitBond’s platform. However, any start-up that is confident that it can repay the small business loan is encouraged to apply.

3. Peer-to-peer microfinance loans for Small Businesses

Alternatively, you could also apply for an interest-free microfinance business loan from the US-based microfinance peer-to-peer lender Kiva. Kiva offers small loans to entrepreneurs and small businesses across Africa and other emerging markets.  All this with no interest charges to help small businesses to jump-start expand existing operations.

Kiva works with local microfinance institutions in Kenya and has been lending successfully in the Kenyan market for several years.

Working in Nairobi garage, I have noticed that most of these opportunities are accessed through networking with different people. Most of our members have found funding and other opportunities by interacting with other fellow coworking mates. No man is an island, start networking and you will easily come by funding opportunities.