7 point expert tips on financing your agribusiness
Lack of finance has commonly been cited as one of the key barriers to agriculture for the youth of Zim. However, stakeholders recently challenged students at College of Agriculture and Veterinary Services in Kenya to look for innovative and alternative ways to get started.It was sponsored by the UN Food and Agriculture Organisation and Microsoft, with support from other organisations, including World Animal Protection, Elgon Kenya, Equity Bank, Amiran Kenya, and Socca.
The seven keys to success
- 1.Get your act right with banks: It is possible to get money from a bank, but you must demonstrate your ability to run a viable business. “Some people have tried to get loans through banks but they were turned down. However, after some training, their ideas proved to be viable and banks financed them,” said Mr Silano Assanga of RTI International.
- 2. Turn your farming into a business to make it more attractive: To remove the risk from agriculture and make it an attractive opportunity, we must start looking at through the lens of business, said Ms Esther Muiruri, associate director in charge of agribusiness at Equity Bank.
“Traditional bankers did not go to agriculture school and when you ask them to lend to agriculture they see the risk before they even consider giving a loan. They start asking, what if it doesn’t rain? What of the diseases in the soil that we hear about? But in reality, crops need water and not necessarily rain, while crops do not necessarily need soil but nutrients,” she said.
- 3. Be your seed capital: Start with what you have. Be the first finance resource for the idea you want to bring on board, said Mercy Limbua, a youthful food chain consultant. “Start saving from now (in college), such that by the next five to seven years when you are ready with your idea, you have the capital. Don’t look at the time, it flies. When I was in college, I started a small business venture and saved any monies I made. By the time I was completing college, I had savings which I later topped up and began my consultancy firm.”
- 4. Assets can also be considered as finance: Don’t look at access to finance as though it is only getting direct money. We youth tend to see money as the only solution to start or grow our businesses. We need to come out of that cocoon, be creative, and open-minded. If you have an idea and you need inputs or resources, you can be given the finance inform of a resource such as machinery, said Ms Limbua.
- 5. Approach institutions such as NGOs: You can also talk to organisations such as FAO, USAid, RTI, and others. They support youth. Some give money directly, others through capacity building and indirect financing. Do your research and find out who is giving or providing what
- 6. Start or join a VSLA or group: “Village Saving Loan Associations have transformed lives. VSLAs are groups that save money and lend to members. Most are trained on table banking and can be an excellent source of financial support “Young people are saving and getting capital to start businesses,”
- 7. Mobile loans: If you are taking mobile loans, use them for meaningful purposes.
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