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4 Minutes Read

The Benefits of Micro-Loan Programs for Kenyan Small Businesses 


Micro-lending programs are a great approach for small to medium sized enterprises in developing country to get going. In Kenya, it can be particularly practical as a great deal of the nation's small business owners have restricted access to conventional financing. Lucky for these company owners, micro-lending programs are ending up being considerably common. Micro-lending describes loans that are used at a reasonable rate of interest and with a very short payment period. Usually, these loans should be utilized for small business purposes.  These loan programs also tend to be a lot easier to obtain than a routine bank loan. .

What is a Micro-Loan Program?

Micro-loans are small loans that are provided by microfinance companies (MFOs) and microlenders to financially-vulnerable people.  Micro-credit programs provide small monetary services that assist low-income individuals and communities enhance their financial health.

Micro-credit usually describes funding of small amounts, in between 50 and 65,000 KES. (3-3600 USD)

Micro credit is a type of financial services that can be used to cover a variety of needs, including small company funding, medical expenses, school expenditures and even emergency situation living expenses. Micro credit programs are generally run by non-profits or microfinance organizations (MFI). Micro credit can be offered in a range of methods, including loans, credit lines, and even beneficial rates on costs.


Type Of Micro Finance Programs 

Micro lending: This is the type of micro credit that most of individuals are familiar with. With a micro loan, you usually get a little amount of money that you can then use to fund your small company (or any other function). Micro lenders are usually non-profit business or microfinance organizations that utilize micro-lending services. You can find these loan providers through online microcredit services like Prosper or Positiviti Lending.

Micro savings: This type of microfinance program runs in a similar way to a conventional cost savings account. You transfer cash into this account, which then makes interest. The main distinction is that with this kind of microfinance program, you borrow cash from the account and repay the loan with interest. Microfinance companies or micro financing business typically use micro expense savings products.

Micro bank loan: In this kind of program, you acquire money from a microfinance organization and utilize it to begin a little company. Normally, the loan has a minimum of $5,000 USD.

How Micro-Loan Programs Work

Microlending programs operate in a similar method to micro credit.

The main distinction is that you get a smaller sized quantity of funding. You typically receive a micro loan from a microlender where the loan quantity is $100 USD. You can then use this loan to fund your small company or any other purpose.

Microfinance organizations generally provide micro-lending products with different terms, interest rates and payment options. Depending on the loan quantity, interest rate, and payment terms, you can pick to borrow in between $100 and $50,000 USD.

The Pros of Micro-Loan Programs for Entrepreneurs


Accessibility: While micro credit programs are readily available to anyone, micro-lending programs typically only accept applications from certified individuals. This means that the easier access to these programs makes it a lot easier to start a small company.

Reasonable Interest Rates: Micro-lenders typically charge rates of interest that are much lower than standard loaning rates.  This implies that you wind up paying much less for the extremely exact same amount of money.

Bad Credit, No Credit and Limited Credit: Many microlenders recognize bad or limited credit report, which opens more options for those without traditional lending options.

Short-Term Loans: Microfinance organizations generally utilize short-term loans, which can be practical for those looking for a much shorter loan duration.

Easier Secured Loan: Microfinance organizations generally use simpler safe loan alternatives, that makes it a lot easier to get a loan versus a company residential or commercial property.

Why Micro-Lending is vital for Kenyan Small Businesses

Microfinance programs can be a fantastic alternative for Kenyan entrepreneur who don't have access to standard financing choices. Traditional banks usually do not provide loans or credit lines to small companies in Kenya, which indicates that great deals of company owner discover themselves in a money crunch when attempting to expand their business.

For example, when you require to expand your company and hire brand-new employee, you need money for a number of things, such as a new office, computer systems, furnishings and other equipment. Nevertheless, not all companies have access to standard funding. With micro-lending programs, entrepreneurs receive a little amount of cash that can be used for these functions.


Conclusion

Micro-credit programs are a wonderful approach for company owner that does not have access to formal financing. There are numerous Micro-lending programs that permit you to acquire smallamounts of cash from microfinance organizations. These programs make fantastic monetary sense for business owners, as they usually provide lower rates of interest and brief repayment durations, suggesting you don't need to repay the loan over a long period of time.

About Positiviti Lending: 

With Positiviti Lending, we empower East African entrepreneurs to revolutionize the local market and grow their businesses. Our platform provides microloans tailored for this region's 400 million-strong population nearly 6% of the global total! We know our innovative approach will create jobs, spark economic growth and ultimately make a real difference within these communities. 

Unlock the potential of your money with a microlending strategy. Positiviti Lending makes long-term financial planning smarter and safer, allowing you to enjoy increased savings without jeopardizing current cash flow stability. Put your finances in action today, sit back and watch your funds grow!





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