Join a ‘chama’ to achieve your goals

In a ‘chama’ people with common interest join hands and an individual can borrow in the group by way of co-guarantee mechanism. File | Nation

I have just graduated from Egerton University with a Bachelors degree in Commerce with a bias in management science. I graduated with a second class honours, upper division.

My problem is that I am interested in venturing into business but since I am unemployed, the startup capital has been a big challenge. The banks I have approached for a loan are not willing to finance me either, given that I am jobless. Advise me on any other possible source of a loan to start my business. I have an interest in the money transfer business and agriculture. Do you think these are promising lines of business for starters like me?
Thanks in advance.

— Odiwuor Callistas Odero

Thank you, Callistas, for writing to us.

We sought guidance from the Kenya Commercial Bank (KCB) on the issue you raised with us and we thank the lender for responding promptly.

The lender shares your opinion that most financial institutions would ask for bank statements to analyse and help determine the borrower’s character as well as his/ her repayment ability. This is because such institutions have obligations to their stakeholders such as shareholders and depositors.

However, the bank held that there are other options you can consider to unlock your potential. For example, you can get into a group loan scheme where people with a common interest come together and an individual can borrow in the chama by way of co-guarantee mechanism.

Another investment vehicle that is at your disposal is individual microbanking loans. This is a flexible initiative because its requirements include even household items.

You can also take advantage of government support. As a youth, seek help through the Youth Enterprise Development Fund (YEDF). Specifically, a recent deal between YEDF and Amiran Kenya Ltd supports young farmers to acquire a tailor-made Amiran Farmers Kit (AFK) designed for the AgriVijana Loan can help you in agriculture.

Other sources of finance you could try are raising personal savings, borrowing from friends and relatives, or forming partnerships.

On your question about the types of business ideas you can venture in, the bank noted that money transfer business as well as agriculture are both good avenues. Since you already have an interest in these lines of business, chances are high that you will be driven by passion, thereby increasing your chances of success.

The Kenyan economy heavily relies on agriculture and demand for agricultural products has been evident over the years. One gets to enjoy economies of scale by engaging in large-scale farming.

On the other hand, this poses greater risks of loss, which must be mitigated by engaging an agricultural extension officer as well as insuring the venture.

For the money transfer services, you will most likely start off as an agent. Here, the differentiation is in customer service. This would determine whether a customer comes back for repeat business and refer others to you or not.


This is to bring to your attention that a sum of Sh7,000 was irregularly withdrawn from my Kenya Commercial Bank account, University Way branch. I have made several attempts to have the transaction reversed by the bank but nothing has come forth so far. This is, therefore, to invoke your authority to take over the matter for an amicable conclusion.
Thanking you in advance. — George Kengara

Thank you, George, for seeking our help in this matter. As requested, we communicated with your bank, KCB, and lodged your complaint. We re pleased to inform you that the financier responded promptly.

The bank said it had been in touch with you and that you have already confirmed that the problem has been resolved. Kindly get in touch with us in case you need further assistance.

Looking for answers? Send your queries and daytime telephone numbers to Yvonne Kawira: E-mail: [email protected]