Are you looking forward to venturing into agribusiness, perhaps growing certain crops or keeping animals? Well, playing a part in a sector that dominates Kenya’s economy is a great idea. Agriculture has been and remains a key in the backbone of the country’s economy.
Unfortunately, raising sufficient capital to carry out farming activities can be a challenge. Other challenges could derail many people’s dreams of getting into farming. However, raising the capital needed to transform the idea into reality remains the biggest stumbling block among many. Below are five ways you can raise the money you need to dive into farming.
Find an Investor
While agribusiness ideas are boiling in your brain, there is a person somewhere who has lying cash but lacks ideas or even time to start the venture. Perhaps they have another commitment somewhere, such as a full-time job, that won’t allow them to concentrate on investments. Identify such a person, discuss your idea and get an opportunity for a partnership.
While you bring your idea, time and commitment to the venture, they bring the capital. Many people out there are willing to invest their money, provided the idea is sound. Therefore, before you start looking for a partner, think deeply about the venture and have a clear plan of how you intend to execute it.
Consider Government Funds
The government has several initiatives aimed at providing capital to ventures and enterprises. Currently, the hustler fund is the most popular initiative in the streets. Launched by the government in 2022, the initiative has disbursed more than Ksh35 billion to about 20 million opted-in Kenyans in less than a year. The loan product ranges from Ksh 500 to 50,000. However, you are eligible for the lowest amount limit of Ksh 500, which keeps increasing once you repay in time. If you borrow and pay within the stipulated time, your loan limit will increase significantly. If you are a formally recognized group, you can apply for the Group Micro Enterprise Loan Products (GMELP) and receive a loan of between Ksh 20,000 and 1,000,000.
You can take advantage of other available initiatives to get funds for your business. Examples of the initiatives include the Uwezo Fund, Youth Enterprise Development Fund and loan products from the Agricultural Finance Corporation. The Youth Enterprise Development Fund, for instance, has been supporting young people by offering affordable loan products to start or expand their ventures.
Reach out to Family and Friends
Before you even move to institutions for funds to start your farming business in Kenya, you can talk to the people close to you or in your circle. Family and friends know you better and can help you finance your farming business without much hassle. Perhaps part of the amount you need is meant for leasing land. You can cut your startup costs by approaching your relative or friend who, by chance, could be having an idle piece of land somewhere.
The conditions that come with this form of funding may be unfavourable to you. Truth be told, some people may not be comfortable seeking financial help from their kin. But if this option can work for you, do not mind embracing it to start your venture.
Apply for an Eligible Bank Credit Facility
Equity Bank has a credit facility aimed at financing youth to establish agricultural-related businesses. The product targets young people who have studied F & A-related technical courses. One can get a loan of between Ksh 100,000 and 1,000,000, repayable within up to 2 years.
Save the Little You Earn
A great way to raise funds for your agribusiness venture is through savings. There are no deadlines to pay the loan and no interest. Of course, saving to fund your agribusiness idea can be pretty challenging, mainly if you are not employed. But if you have a small hustle, where you are earning a little amount for the day, you can sacrifice and save a little.
Consider options such as the M-shwari lock savings account, where you lock your money until you reach your savings target. Besides, you can also join a reputable Chama or form one with like-minded people. The bottom line is knowing that you don’t have to start with a large-scale farming venture. Focus on starting small and saving to raise the amount.
Lack of capital should not hold you back anymore. Think through the above options and pick one that can help you raise funds to start your agribusiness venture in Kenya.