Big Banks in Kenya step into the start-up scene to offer a financial hand
Following calls by the Kenyan government for financial institutions to allocate entrepreneur seed funds, Kenya Commercial Bank has pledged sh1 billion towards the support of start-up ideas and innovations.
The banks CEO made the pledge during an entrepreneurship panel discussion at KICC during the pre-GES convention at the Centre in response to deputy president’s challenge to financial institutions to set aside funds for startups like the government has in the 2015/2016 budget.
The deputy president asked financial institutions to however change the model of issuing funds from the old way of asking for land security or any asset collateral model to lend money. However in the announcement , Joshua Oigara did not dish out details on fund issuance even as he declared the bank’s commitment in investing.
Some of the funds the government has put aside for the start-up scene include; Sh1 billion to Enterprise Kenya, Sh850 million to the Uwezo Fund, Sh500 million to the Women’s Enterprise Fund and Sh300 million to the Youth Enterprise Development Fund.
Last week, Barclays Group Africa also launched Barclays Africa Supply chain challenge, an initiative that will see innovators come up with ideas that will solve supply chain breakdown between Sellers and buyers using block chain Distributed Ledger or any other technology that can provide the solution. In the end, the best innovator(s) will be awarded a prize money of USD 10,000.
Equity bank is also one of the institutions that have shown interest in supporting the start-up scene before offering loans of up to 50,000,000 KES. The gesture that is not only in the Kenyan scene has got big banks globally turn to start-ups most of them being technology start-ups to offer a financial hand. As entrepreneurial costs go down, more and more institutions are focusing on how venture innovations can help them be more competitive and efficient.
If implemented to the latter, the new proposal by the government might mean less hustle for start-ups to acquire bank funds compared to the past. Start-ups will only need to present an upright business proposal have a fair capital outlay in place among other terms that will hopefully be manageable for the young innovators.