Investment News July - August 2016

JULY/AUGUST 2016

PRICE KSHS 250

February– March 2016

PRICE KSHS 250/-

For the small business opportunities

Sources of Money for Startup Business

FOCUS ON AGRIBUSINESS

OPPORTUNITIES IN KERICHO COUNTY

INVESTMENT NEWS 3

For the small business opportunities

INSIDE THIS ISSUE

July/August 2016

SPECIAL REPORTS PULL-OUT ON AGRIBUSINESS OPPORTUNITIES IN KERICHO COUNTY

REGULARS Publishers View………… 4 Public Service Millionaires and Corruption

Kericho County is one of the Counties with many opportunities for small scale businesses especially those based on agriculture. In this special pullout, we highlight some of those opportunities ……………Start on page 11 Sources of Funds for your small Business

The last word……………

30

Funding options running dry?

Here is a great source of finance for your small business startup ………………..Start on page 7

Read how things are changing in the realm of preaching

Small Business Growth Plan

Quick News………………. 5

How business plan can help you grow your small enterprise.

Books and culture…….27

…………… Start on page 25

4 INVESTMENT NEWS Investment News Editor Muli wa Kyendo Associate Editor Emily Muli Contributors Francis Ochieng Wilfred Gachanja Nguli Muli

Marketing Charles Kavuu Mary Mumbua Investment News is published bi -monthly by Investment News Ltd, P.O. Box 20257-00100, GPO, Nairobi, Kenya, Tel: 0773991820 , 0721302418,

Email: Editor @investmentnews.co.ke

ISSN 1814 –9966 The Editor welcomes contributions but takes no responsibility for loss or damage.

All rights reserved Copyright: Investment News Ltd

PUBLISHER’S VIEW

‘Public Service’ Millionaires and Corruption in Kenya Since its inception, Investment News magazine has believed in empowering local entrepreneurs even as Kenya encourages foreign investment. The two are not mutually exclusive.

Rich Kenyans will offer more attractive market for foreign investors because businesses are looking for buyers of their products. If those buyers can be found around where their businesses are located, that much the better.

Wealth that is beneficial to investors whether local or foreign, is wealth that is spread across the country. A handful of millionaires cannot make a market—and that is where we are in Kenya today.

And the reason is that our millionaires are in the main, not people who have worked for their wealth. They have looted it from the public coffers. Count all of them and chances are that they were in public service. You don’t need to be a genius to know that the only way to make a lot of money in public service is to steal. In other countries, public servants, even when they are presidents, do not swim in wealth. They live in comfort.

“Public service millionaires”, apart from siphoning away public money, do not have businesses that hire people to spread wealth.

The type of millionaires that Investment News has advocated are those that came out of personal initiative—people whose wealth is a result of providing a service or product.

This type of millionaires have one great advantage—they spread wealth. They establish businesses that hire other people. From one millionaire, you can get ten others. And that is a great contribution because it increases people with buying power. It establishes a market for other goods and services.

And above all, it creates desirable environment for other investors—local or foreign.

INVESTMENT NEWS 5

Quick News

Bayer to Buy out Monsanto Bayer has offered a $62 billion deal to buy Monsanto the controversial promoter of genetically modified seeds best known as GMO. The buyout would create a global giant in agriculture technology touching much of global food production through the development of seeds and pesticides.

The buyout would create the world’s largest seed and farm chemical company with a strong presence spread across the world. Bayer says the deal would give the world more productive agriculture to meet the food needs of a growing population.

There is concern about how the merger will impact Monsanto’s business of selling genetically modified crop seeds. The seeds have been blocked in some countries and are a subject of anxiety among consumers and the target of envi-

ronmental activists.

Bayer’s presence in Europe could mean Monsanto would try to spread it’s sales to that continent although political resistance to genetically modified crops remains strong in Europe.

Bayer claims farmers will get a broader range of products such as seeds and pesticides that work better together.

Pesticides that Kill Honey Bees Reduce Honey Production Exposure to a pesticide significantly affects the learning of honey bees according to a recent study. The study is the first by scientists looking into how bees respond to field-realistic-levels of the neonicotinoid insecticide ‘clothianidin’ which was banned for use on flowering crops by the European Union in 2013, but is still commonly used in develop- Sprayining crops:

ing countries.

Scientists exposed honey bee workers to the pesticide for 11-12 days and then assessed the effect of the pesticide using a proboscis extension reflex conditioning assay, which tests how bees learn to associate an odor with a sugar reward.

The scientists found that clothianidin impaired the honey bees’ ability to learn on.

6 INVESTMENT NEWS

Smart Funding For Your Small Business Funding options running dry? The Affirmative Action Social Development Fund administered by your County Women Representative is one of the cheapest and easiest sources of funds that can uplift your small business.

And with it we start our series to looking at some of least known and most accessible sources of funds for your small business.

Former Devolution CS Anne Waiguru (Right) addresses women reps after the launch of the fund last year. Below: Women in a meeting to discussion the fund

BY NGULI MULI

T

he Affirmative Action Social Development Fund was established after women representatives complained that they had nothing to make them relevant at the grassroots. As a result, a two billion shillings fund was established. Its purpose is to TURN TO PAGE 27

JULY/AUGUST 2016

Doing Business in the Counties in Kenya

PRICE KSHS 250

8 INVESTMENT NEWS

2016 EDITOR’S NOTE Contents: Kericho County is one of the agriculturally significant areas of Kenya. It’s big name comes from tea farming. The tea industry has however overshadowed the great potential for other farming activities such as dairy, poultry and horticulture. It is this potential that we focus on. This is however not an exhaustive analysis but it should be an eye opener to the business and investment opportunities that are available in the County. Our main purpose is to isolate opportunities that are available for micro and small businesses, which benefit the largest number of people especially the youth, many of whose associations are registered with the Micro and Small Enterprises Authority.

Acknowledgement: There are many people involved in the production of a guide like this.

I can therefore not acknowledge everyone who contributed. It is however, important to acknowledge the help we got from the County Government of Kericho which was always ready to provide information whenever we needed it. Significant contribution was made

by Mr. Joel Kipsang Bett, County Secretary; Eng. Philip Mason , CEC Trade; Mr. Kipchumba Koskey, Chief Officer ICT and Mr. Johnston Rono, Director Agriculture.

I would also like to acknowledge the contributions of the following: Mr. Jeremiah Rotich and Johana Langat of Livestock Production; Leah Mwangi, Director, Fisheries; Mr. Joseph Wainaina, Crops Officer and Michael Wairoma of Department of Trade.

Opportunities for Small Businesses in Kericho County Copyright 2016 Investment News P.O. Box 20257-00100 Nairobi, Kenya. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic photocopying, mechanical recording or otherwise without the prior permission of the copyright owner

INVESTMENT NEWS 9

GOVERNOR’S MESSAGE

Welcome to Kericho, ‘The County of Plenty’ Prof. Paul Chepkwony

K

ericho is the “ County of Plenty” especially in agriculture. Tea remains not only our biggest industry but also our branding industry. It is the foundation on which Kericho’s economy was built. It is the foundation on which we continue to built our economy even as we diversify to increase the creation and distribution of wealth among our people throughout the County.

In Kericho, we have chosen to concentrate on creating an enabling environment for businesses to set up and thrive. Key among these are the roads infrastructure. Roads enable not only communication and transportation of goods, they also open opportunities for businesses as traffic increases So far, we have constructed 1500 kilometers of roads and our goal is to reach 5000 kilometers by the end of 2017.

In health, we have concentrated on modernization and installing new facilities. We have spent Shs87 million to establish and equip a modern start of the art ICU/HDU facility at the Kericho District Referral Hospital making the hospital second only to Kenyatta National Hospital in size of the facility with latest equipment.

Healthy people create most effective labour force. Following on this, therefore, we are working to buy ambulances to be stationed in every-

one of the 30 wards to decrease the period taken to respond to emergencies.

ICT—information communication technology plays a key role in the development of modern businesses. Our vision is to increase availability and use of ICT so that Kericho can become the leader in this regard. We started by establishing ICT Citizens’ Service Centres in all the six sub counties. The purpose was to bring internet services close to everyone which is essential in business. How far we have travelled in this direction can be attested to by the fact that Kericho was ranked among the best counties in the use of ICT by the Information Communication Technology Association of Kenya.

Trade and businesses are the key to development. They create wealth and employment. That is why we have spend Shs100 million to finance small businesses and entrepreneurs through the Jitegemee Enterprise Fund. We are pleased to say the impact is already being felt. I am urging traders and businesses to join established saccos to continue to access low interest loans and participate in making Kericho the wealthiest County.

Welcome to Kericho, the County of Plenty.

10 INVESTMENT NEWS

DEPUTY GOVERNORS MESSAGE

Economies of Scale Will Help Farmers and Entrepreneurs Up-scale their Businesses

S

ince we were elected into office as the Government of the County of Kericho, our major focus has been to find out how we can bring a difference in the lives of our people.

We have been keenly aware that the purpose of setting up County Governments was to bring services closer to the people so as to affect the pace and nature of their development. People must therefore see a difference in their lives—in the way they do their things and in their incomes.

Our first task was to find out what resources and opportunities are available in Kericho that we could build on. The next step was to find out from the people what they were best in .This led us to the concept of One Ward, One Product that divided the County into Seven Sectors of Excellence.

The idea behind this is simply that every region has something it produces in abun-

dance and with ease.

Some areas will concentrate on fruits and fruit products, others will produce milk and milk products and so on across the County If everyone in one region produced the same thing, it would be easy to market .

In this way it will also be easy for the government to help get markets for the products just as we have done for farmers of sweet potatoes in Soin.

Of course, for the farmers to be successful as business people, they need information on a variety of subjects such as what to invest in, financial sources, marketing and business management. And that is why we are joining up with publishers of Investment News to highlight business and investment opportunities within our County.

We hope that this supplement on agribusiness opportunities for small businesses in Kericho will be useful to both active and potential small investors.- Susan Kikwai, OGW

INVESTMENT NEWS 11

A Fascination with Kericho They came, they saw, they settled

A

story is that told by an American whose grandmother became overwhelmed after hearing the story of Kericho. She wrote to her son and daughter in law who had just settled in Litein. “Do you know a place called Kericho?” she wrote to her son.

“Yes,” the son wrote back.

“Kericho is 21 kilometers from where we are!”

On reading this, the story goes on, the old woman sold all her property and packed and moved to Kericho where she

The main street in Kericho town in the 1930s

started a nursing home. That was in 1924.The ending of the story is that the old woman

brought first her sister and later many other Americans who fell in love with the lush, sprawling beautiful tea farms in Kericho.

This is the poetic description of another European visitor to Kenya. “Tea plantations spread across acres and acres of land.

The bright green of the leaves were brilliant in the sun, glistering with moisture from water falling on the leaves…”

From Kericho alone millions of kilograms of tea are produced every year, making it the home of tea growing in Kenya.

The entry of locals into trade is dramatically captured in the story of the White administra-

12 INVESTMENT NEWS

tor, Gregory Smith, known locally as Kiptabut, from his habit of entering kitchen granaries to look for excess food for public distribution. He was distressed to see local people going hungry or dying during one particular period of food shortage in the 1930sthat he went across the entire breadth and length of Kericho personally entering the kitchen stores to see if there was millet stored there. Wherever he found some, he would take it out and give it out to the needy It was from this that in 1949, Kiptabut decided to organize Africans in the first ever coop-

A street in Kericho town today

erative in Kericho, Kipsigis Traders Savings and Credit Cooperative Society, -which still stands— so that they could access stock for their businesses at factory prices.

Kipsigis traders spread opening new shopping centres and

markets.

And although the spirit of trading ebbed out somewhat after the exit of these early entrepreneurs, there is no doubt about the contribution they made in opening up the County to concepts of business.

Jitegemee Enterprise Fund.

There is a growing number of people wanting to start and run businesses in Kericho County. There is therefore a need for a variety of product and service providers such as financial and information institutions to assist the business community.

The demand was demonstrated when the County asked for applications from people who wanted small loans for business under a County programme called

The County had allocated Shs 100 million to the Fund. But the applicants were 13,000 applicants raising the demand to Shs6 billion.

Following this, the County is working to revive dormant saccos to increase sources of funds. We are also encouraging businesspeople to join existing saccos and benefit from loans provided under their microcredit sections

INVESTMENT NEWS 13

BUSINESS OPPORTUNITIES County puts its best foot forward in creating a welcoming Climate

T

he opportunities that have arisen out of the Kericho County Government policies are best exemplified by the subdivision of the county to what has been called “the seven sectors of opportunity.”

The idea, according to the County, is to encourage each of the seven regions into which the County has been divided to concentrate on what they can best produce given their situation and natural resources.

It is a system that is likely to increase productivity because it also tackles one of the most important problems in business— marketing. As the County explains, producers will be able to join up and market their products together, thus minimizing marketing and transport costs.

Government has upgraded and expanded education and health sectors with hospitals and dispensaries being equipped and face lifted across board.

Other significant improvements have occurred in the communication sector where the aim is to establish a knowledge-based economy. The County Government has established ICT centres and has plans for newspapers and magazines.

Youth polytechnics have been equipped with internet facilities ICT is closely related to availability of electricity. And the County Government has been working hard to increase supply of electricity. Nearly all markets, towns and even villages

The County Government has put great effort in modernizing roads joining up market centres. New, well constructed roads offer great opportunities for roadside businesses. Shops, hotels, kiosks and vegetable stalls are some of the obvious ones, but there are many more including photocopy shops.

Investors will find much supply of water as Kericho County is endowed with ample rainfall, thus water can easily be individually harvested and stored for use in business.

Of importance too is the health of the work force. The County ICT Centre at Kapkatet

have ample electricity supply from the national grid.

In the following pages, we look at selected and varied types of business opportunities that are available to small businesses in Kericho County. The emphasis is on opportunities that do not require much capital or land. In doing so, we have talked to people involved in the businesses or experts in the various fields.

For a business to succeed you need a reliable financial partner and in this regard we discuss some sources of low interest finance. Imarisha Sacco in one of the most active and you can read about the projects and the experiences of some of the people they have helped.

14 INVESTMENT NEWS

Opportunities in Dairy Farming Fastest growing sector with highly profitable opportunities Dairy farming is one of the fastest growing sectors in Kenya.

The common breeds of cows Kept by farmers are; Freisian, (Potential yield: 40-60 litres milk/day), Jersey, 20 litres/day, Aryshire (30 litre/day and Guernsey(25 litres/day To start a dairy enterprise one needs to do cost-benefit analysis so as to make informed decision on level of investment and the anticipated benefits. It is necessary for dairy producers to view dairy farming as a business with a view to minimizing the cost of production while increasing yields through use of appropriate management techniques.

These include: feeding according to animal maintenance and production requirements, use of quality breeds, good health and ensuring cow comfort.

It is important that a farmer maintains proper records that include history of the animals

and milk production records per animal .

Simple Profitable Business for those without a Cow You do not have to own a cow to join the dairy business. Buying and selling milk is a profitable business.

And what is best is that you don’t need a large capital to start.

Fresh milk will on average cost you Shs 40 per litre and you will be able to sell your purchase at Shs60 or Shs65 per litre. That gives you Shs20 to Shs25 without you doing much more to the milk.

You can also add value with little effort and sell your milk at a much higher price. A simple value-added product in Kericho is mursik which can easily be packed and sold to a fast growing market.

Yogurt is another product which is easy to make and sell. Estimates indicate that with yogurt your

profits can shoot to 500% gross or 300% net.

You will need an initial capital of about Shs100,000 to among other things, purchase branded tumblers to package your yogurt. When you have expanded, you will need an additional Shs350,000 to buy a pasteurizer and another Shs32,000 to register for KEBS certification.

When all these are done, you are ready to spread your products to the market. The beauty is that, like in the case of milk, you can start with your neighbours before expanding to the supermarkets and other stores. A well managed yogurt business should bring you Shs 100,000 per month in the initial stages.

INVESTMENT NEWS 15

Sweet Profits from Sweet Potatoes County Government Gets International markets for local crop

By Joseph K. Wainaina County Crops Officer – Kericho Sweet potato is an upcoming crop in the county having been popularized as an alternative crop to maize as a food security crop.

Maize was the main staple crop in the county being consumed as ‘ugali’ for breakfast, lunch and supper. In 2012 maize was infected by Maize Lethal Necrotic Disease (MLND) and yields started to decline significantly. Farmers were forced to either totally abandon planting maize or replacing some maize acreage with other alternative food crops. Sweet potato proved to be the ideal replacement in the warmer areas of the county while Irish potato was preferred in the cooler areas.

Soin/Sigowet and Belgut Sub Counties were the traditional sweet potato growing areas and with the advent of the maize disease the crop acreage began to increase gradually.

Some little sweet potato is grown in Kunyak area of Kipkelion Sub County. With good management the crop can yield upto 20 Tons of tubers per acre. In 2015 the area planted with the crop was 532.5 Acres.

Production of sweet potato was boosted in 2014 when SACOMA (a UK based Kenyan owned company) started to import sweet potato tubers from Kaplelartet Ward in Soin/ Sigowet Sub County. Initially the sweet potato varieties planted were very few with the local white-fleshed variety (Chebolol) being common. SACOMA linked up with CIP (International Potato Centre) which introduced farmers to the orange-fleshed varieties, which are fortified with vitamin A. Farmers were also capacity built on aspect of tuber production and seed (vine) multiplication. In addition, some farmers were provided with free vines to start commercial sweet potato seed (vine) multiplication. The varie-

16 INVESTMENT NEWS ties that were introduced by ICIPE were Vita and Kabode.

Another buyer of sweet potato by the name Ringa factory (Homabay County) has entered the market and is purchasing the Vita and Kabode varieties of all sizes, unlike SACOMA, for making of sweet potato puree which it sells to Tuskys Supermarkets for making confectionaries. The factory relies heavily on supply from Kericho in the dry season beITEM

Gross Income Yields - Tubers Vines Total Gross Income Variable Costs Planting materials Manure Insecticide e.g Dimethoate Land preparation 1st Ploughing Labour Manure application Ridging/Mounding Planting 1st Weeding 2nd Weeding/ Earthing up Harvesting Gunny bags Cleaning, sorting and packaging Total variable cost Gross margin = (TGI-TVC) Gross margin/Acre

cause kericho receives extended rainfall allowing for year-long production.

Demand for sweet potatoes is projected to increase with commissioning of the Kiptere Sweet Potato factory based in Soin/Sigowet Sub County in the near future. Engaging in the sweet potato enterprise is profitable as indicated by the Gross Margin analysis shown below; How much you can get from an acre of sweet potatoes

UNITS

PRICE/ UNIT (KSH)

QUANTITY

Tons Vines

10,000 1

20 25,000

Bags Tons Lts

1,000 1000 800

6 4 ½

1,200 4,000 400

Acre

3000

1

3,000

Acre Man Days MD MD MD MD Bags MD Ksh

1500 200

1 6

1,500 1200

200 200 200 200 30 200

6 6 6 10 180 6

Ksh.

TOTAL VALUE (KSH)

200,000 25,000 225,000

1200 1200 1200 2000 5400 1200 28,300 (225,00028,300) 196,700

INVESTMENT NEWS 17

Money from Fish Vast market, little supply According to Leah Mwangi, Director of Fisheries in Kericho, the demand for fish is increasing fast in hotels, universities and even among individuals. This presents a big opportunity for farmers to go into fish production. And the County Government of Kericho, is providing support to the farmers by providing qualified extension workers to guide the farmers.

Ms. Mwangi says, “Fish has a large market that has not been exhausted.”

Varieties of fish that do well in Kericho are tilapia and catfish.

advises farmers to seek help from the ministry to avoid being misled by quacks.

CAT FISH PRODUCTION Pond size 5mx5m by 2m deep=50m3 Excavation of pond Labour cost = 3,000 Cost of pond liner(Incase you do it away from rivers)= 2,000

To start farming fish you need water from a permanent source. In Kericho where rainfall is Cost of Fencing of fish pond( Chain link 4m height and abundant, water is plentiful and you can easily posts) = 3,500 make a pond in which to rear your fish.

Stocking rate 50 cat fish/m3 To succeed in fish farming you need the advise and guidance of an expert. Ms. Mwangi

Fingerlings to stock 50x50m3=2,500

Inspecting a fish pond in Kericho County.

Fish feeds for 8 months = 1,000 Kgs

Cost of fingerlings = 2,500xKshs 5 each =12,500

Cost of fish feeds = 1,000xKshs 80/Kg= 80,000 Total Cost= Cost of pond construction+ Cost of pond liner+Cost of fingerlings+Cost of fish feeds =3,000+2,000+12,500+80,000=97,500 Minimum Income from sale of fish =2,500xKshs 100 per fish =250,000 Net income= Income – Expenses =250,000-100,500=149,000

18 INVESTMENT NEWS

Local Poultry Farming Chicken farming is best suited for the small business person.

You should start by deciding whether you want to rear free range or hybrid chickens.

customers’ demands. An incubator for 48 egg will cost you about Shs 20,000/- while an incubator for 96 eggs will cost you Shs30,000/=.

From a small town plot, statistics show, you can make as much as Shs100,000/- per week from eggs and chicken sales.

Broilers: Broilers are profitable when sold early enough. Look for a guaranteed market to supply.

According to Dr. Alex Kimeli, Unga Feeds Technical Representative of South Rift , for commercial purposes, a farmer can choose to specialize in layers, which are chickens for eggs, broilers, chickens raised for meat or improved kienyeji.

Roasters: Roasters are fairly mature chicken. Generally they are sold when four or five months old when they are heaviest but still with tender flesh. They are profitable raised free range Frequently they are fattened for two weeks or so before going to the market.

Having made your choice, you can now specialize in any of the following sub-sectors, a combination or even in all.

Layers Egg farmers are glad to pay higher prices for chicken raised to the point of laying so as to avoid risks of deaths and other uncertainties incidental to raising chicks.

Hardening In this you raise chicks up to about four weeks ensuring that you provide all the necessary vaccinations before selling them at a good price “Whatever sector you choose, you have to make responsible managerial and financial decisions to make your chicken farm business a profitable one,” says Dr. Kimeli GMA by Johanna K. Langat, Kericho County

Eggs for the market: Compared to other opportunities in the chicken business, egg production and sale can be more profitable because of the lower cost of production.

Day Old Chicks: The business of raising day old chicks is becoming attractive as more farmers engage in poultry farming. However, this specialized area requires the businessman to be proficient in artificial hatching Gross Margin Analysis based on one indigenous hen for meat Proand have quality chicks to meet duction

INVESTMENT NEWS 19

Stories by EMMA MULI

IMARISHA SACCO SOCIETY

Building Wealthy Counties Imarisha Sacco makes important contribution in Kericho County

K

ericho-based Imarisha Sacco Society prides itself of being a premier sacco in Kenya – in deed, it is the ninth most significant sacco in the country. The Chairman Mr. Mathew Ruto sees it rising even higher to play a much bigger role as a leader in creativity and innovation in Africa and beyond.

“We intend to keep looking for new, improved and affordable ways of empowering our members and customers,” Mr. Ruto told Investment News in a discussion about the role the sacco is playing in the new devolved system of government.

With a share capital base of more than Shs 4.8 billion and a membership of close to 50,000 and a strong base in Kericho town where it owns some of the most outstanding land mark buildings, the sacco has the capacity to spread its wings. “We have now started the journey to Mathew Ruto, Chairman, Imarisha Sacco

Shs300 million in Member Dividends Goes into County Economies This year alone, Imarisha Sacco pumped into the economies of the TURN TO PAGE 23 counties they operate in

spread our services to impact more lives.”

The journey started with rebranding in 2014 from the already powerful but region-based Kipsigis Teachers Sacco to create a national image with a new name, Imarisha. “The new name carries our vision - to assist our members and customers to become self-sufficient and to start their journeys to create wealth for themselves and the nation,

20 INVESTMENT NEWS

Mr Ruto told Investment News.

To achieve the objective, the sacco has created a variety of low interest loans to enable members start and grow their businesses. “We see this as the best way to impact the lives of communities. With profitable, small businesses, we are creating and spreading wealth.

The idea of empowering communities with low interest business loans took root during the banking crisis of 1998. Commercial banks decided to raise the minimum amount of money that accounts should have. “It was a real crisis because civil servants and teachers who make up the core of our members could not afford to maintain such balances. There was a nationwide outcry.”

Saccos reacted by transforming themselves into banks. “We started to offer the services that

commercial banks were offering – in deed we were the second sacco in the country to start the banking services after Muhigia Sacco . Most importantly, our banking section – the Fosas – started clearing salaries and proceeds from our members. Then we realized we had established a capacity for other types of products that could reach people who were now rendered unbankable to the commercial banks. We started a microfinance department to reach these people.

Through the section, the sacco gives low-interest loans to small businesses and farmers.

“Through the section we also work with Central Government and financial institutions to manage their funds for onlending to small businesses and farmers. We can assist county governments to do the same because we have the branch network and technical knowhow to manage such funds. In fact, we are encouraging the counties to let their employees join the sacco so that they can also benefit from our lowinterest loans with user-friendly terms.”

Our mission is to empower our members to create wealth for themselves and the nation

Currently the sacco operates in Kericho, Bomet, Nandi, Nakuru and Kisumu counties. And it’s looking to spread its services to more counties starting with Nairobi.

INVESTMENT NEWS 21

Shs300 million for County Economies FROM PAGE 21 Shs 300 million in form of dividends and interest on deposits paid to members for year 2015. But the real impact of the Sacco in empowering people where it operates in can best be seen from the statistics.

Since its inception, it has given out loans totaling Shs 34,361,121,126/-, thus enabling thousands of people to stabilize their incomes or to start businesses that create wealth and employment. It has encouraged its members to save up to Shs 4,857,357,137/- while loans currently held by its customers are Shs5,633,059,770/-.

“This is not only great resource mobilization, it is also a great effort in empowering the ordinary people financially,” says Mr. Kipruto Arap Sigei , the CEO of the sacco.

The Micro Credit is the key arm through which the sacco empowers the business and farming community. The manager of the department, Mr. Joseph Kirui says that mem-

Kipruto Arap Sigei HSC, Chief Executive Officer

bers to the unit must be people over 18 years who operate businesses. Members should also be in groups registered by the Department of Social Services.

“The unit is helping the small business people who could not access loans. A typical person is the boda boda or the small

How to Join Imarisha Sacco Microcredit Imarisha Sacco supports a variety of businesses in the Counties it operates in . To qualify, you must: be a member of a group that is registered by the Department of Social Services whose objectives must be business and clearly so indicated in their bylaws. have saved with Imarisha Sacco for two months..

have running business, not a startup Those who fulfill the conditions get loan fives times their savings repayable in one year with a grace period of one month. The rate of interest is low at 1.5% per month.

Loans are guaranteed by the group.

22 INVESTMENT NEWS farmer,” says Mr. Kirui.

Such a borrower goes through rigorous training for two months during which the sacco gets to know them quite well. “During the two months we hope to develop a culture of patience and better business management skills among borrowers. In the process you identify the serious business people.”

Small business people receive “graduated” loans. “The loans have a multiplier of five

times your savings and the first loan has a maximum of Shs20,000 repayable at an interest of 1.5 per cent. On repayment of the first loan, a member can apply for another of Shs40,000/- gradually continuing the upward trend.” Because the loans are guaranteed by members, the sacco recommends that members must be from a certain radius so that they know each other well.

The unit has over 100 groups with members engaged in all

types of businesses.

Mr. Sigei, outlines some of the main advantages that make the sacco an excellent partner for the business community: It has a large branch network with VISA branded ATM cards its interest rates can be as low at 12 per cent (as compared with 24 per cent in commercial banks it has excellent reputation and goodwill.

SOLOMON KORIR

Success Recipe: A dream, patience, passion and a Loan When he left school in Form Two due to lack of school fees Solomon Korir was sure he wanted to live in the rural areas. “Life in the rural areas is stress-free and easy,’ Bernard told Investment News philosophically at his farm in Tegat, Belgut. And that meant he

Imarisha Sacco supports farmers in dairy farming with credit and training on finance and business management.

INVESTMENT NEWS 23 would be self-employed. So he joined up with other youth to form a group so that they could uplift their standards of living.

They went into tea seedling growing. However his dream was to start dairy farming, a dream he formed when he saw a successful, zero grazing farm of a neighbor. With the first loan of 7000/-which he got from the group, Solomon bought a cow that was bringing him only 2 litres of milk which was hardly enough. He wanted to buy a cow of a better breed. And the only problem was that it took six months for his turn for a loan from the group which would amount to only seven thousand – hardly enough for his farming business.

“Fortunately we heard about Imarisha Sacco and its friendly loans. We decided to become members as a group.”

“I was so excited that I named the cow Imarisha just to remind myself from where I got the money that changed my world!”. He now has a modern dairy farm with five cows .

Solomon’s plan is to upgrade his cows to 15 to 20 litres a

day each. And he knows he is on the way to doing so.

“With Imarisha loans, I believe mine is an achievable dream. His philosophy is to have a dream, be patient and have passion. “You can wait when you have passion.”

KENNEDY TOO

Family that Has Grown with Imarisha Kennedy Too who describes himself as a mixed farmer in Kepkelion, Kericho County credits Imarisha Sacco for almost everything he possesses today.

He discovered Imarisha when he was a young teacher. He used his first loan of Shs6000/to buy cows which at the time cost some Shs 600/ each.

Solomon applied for a loan from the sacco and a loan of Shs20,000 was quickly processed for him. With the money Solomon bought a young heifer of a better breed which gives him 12 liters a day Kennedy Too shows some of his chickens

24 INVESTMENT NEWS KARI Improved Kienyeji Chicken because although they take longer to mature, they are cheaper to feed and are quite disease resistant.”

Kienyeji chickens are also more profitable. He sells a six week old chicken at Sh 250 and a kienyeji egg at Sh 15 or Sh 20, much higher than the regular eggs which fetch Shs 10 an egg.

“I even used some to pay for my wife’s dowry.,” he laughs “Since then, I have regularly taken loans. I have taken loans to buy pieces of land including the one we live in. We have also established several successful small businesses – all with loans borrowed from Imarisha.

That is why when his wife Viola - joined a women's merry go round he advised them to join Imarisha Sacco microcredit.

“With merry go round, its difficult to safe enough for a meaningful business because you get just what you saved. With Imarisha, you get five times what you have saved. And in just two months!”

bought at Shs70 each. “Now we have around 900. Our target is to reach 3,000 chickens.

“Our desire now is to buy a large incubator – and we are planning to get a loan for it from Imarisha.”

The Toos raise improved kienyeji chickens. “We chose

A full grown Kienyeji chicken goes for about Sh 800 while the broilers go for about Sh 270-Sh 300.

At times, he sells cocks at Sh 1,000 and above during holidays such as April and December.

“You cannot satisfy demand for Kienyeji chicken especially in Western Kenya.”

“Imarisha also gives training on finance and business management. ‘ With the loan she got the Toos bought 260 chickens which they

Kennedy Too and wife Viola at their farm

INVESTMENT NEWS 25

A Legacy of Tea Farming Finlays does more to improve livelihoods in Kericho Finlays is one of the oldest and best established international companies involved in tea farming.

Based in Kericho the company produces 30 million kilos of tea a year from its four tea estates and factories in the Kericho area and Bomet. But its not just tea that the company is involved in, it is also doing a lot to improve the welfare and economic circumstances of the people of the areas.

“We can’t do business where livelihoods are low.

We try to improve lives of the communities around Finlays,” Mr. Sammy Kirui, the Corporate Affairs Director told Investment News.

The best example of Finlays social concern is that of small scale tea farmers who after years of being underpaid approached Finlays for assistance to process and market their tea. The result was the establishment of cooperatives with an umbrella one called Fintea to simplify administration and enable them to benefit from economies of scale and improve productivity.

“Members jointly own the business, enabling them to share profits and improve their livelihoods,” says Kirui.

Fintea provides services such as bulk purchase of inputs and has assisted members to diversify their crops to cushion against

unstable incomes. “We belief in sustainable environment. That is why we take members of Fintea through Fairtrade and Rainforest Alliance to be certified so they can access international markets and get premium prices,” says Kirui.

Finlays has an out growers department with field officer to train farmers on good agricultural practices. As a result quality and yields per acre have improved. And prices can be as high as Shs48 per kg as against an average of Shs 28 at KTDA .

Finlays is also involved in construction and equipping of school libraries and dormitories in Kericho and Bomet. They also give annual scholarships to secondary and university students from the same counties.

26 INVESTMENT NEWS

INVESTMENT NEWS 27

Funding for Business FROM PAGE 6 support women, youth and marginalized groups.

The fund has however had little uptake, mainly because it remains unknown by those who would benefit from it. Because of this, it has become controversial with members of Parliament calling it an unnecessary burden. But as a small business person falling within the specified groups you can still benefit from the loan wherever you are in the47 counties.

fund any group applying should have about 70% of its members fitting those criteria. As a government loan to boost businesses, its interest rate is low at only 5 percent.

This fund is not entirely meant for start-up businesses; education and other non-profit projects are also funded with the same money.

In Machakos County, the fund has been successfully used to implement a good number of community projects, including talent nurturing and establishing gender based violence (GBV) centers.

Women representatives administer the fund. And it can be a great way to jump start your business, whether you have it underway For businesses, Mr. Nzioka says already or have only a fool-proof that one can only apply as part business plan. of a group of at least 20 people.

Records kept in the Machakos Here Investment News looks at Women’s Representative office the operation of the Fund in

show that about 20 such groups have applied for the fund so far in Machakos County and at least one has been able to obtain a loan of over 1 million shillings.

The group is focused on developing modern charcoal burners (jikos) which they manufacture themselves, among other activities.

“We went down to their place and saw the great work they are doing and were impressed. That gave them points for approval of their request,” Mr. Nzioka informed me.

Most of the groups applying for the loan seem to be focused on agribusiness. Bee keeping, horticulture and poultry appear most frequently. Basically, if you are able to convince he committee that you have a market for your product or service, you have a high chance of obtaining a loan.

Machakos County where the women representative is Dr. Susan Musyoka.

As defined in the regulation, in Machakos County, fund is targeted specifically to Kenyan citizens who are marginalized, specifically women, the youth, children, the elderly and the physically challenged.

According to Mr. Samuel Nzioka, the Assistant County Coordinator of

A school at the Coast that benefitted from funds of the MP.

28 INVESTMENT NEWS

The Small Business Growth Plan The Column that guides you on how to move your business to the next level

Why It’s Important to Make a Business Plan ( and How to Make One for your Business) Although money may not be the only reason you establish your small business, it will be the main reason you will continue to run your enterprise. It is simply because without money, you will not stay long in business. If the goal of your business is to make money, then you may draw a road map. A road map is a plan.

In fact many small business owners are not familiar with business planning, or marketing plans partly because of the way they start their businesses and the skills they possess. A producer who has a great track record in terms of production may not have strong planning skills or may neglect the marketing side of the business.

A business plan will help guide your decision making. It includes analysis of how the business will work and plans for operation (marketing, production, human resources, finances, etc.).

The most important thing about a business plan however is that it forces you to think. Here is a simple structure for your business

plan.

actually running your business.

1.Products and Services

You’ll want to cover the technology you plan on using, your business location and other facilities, special equipment you might need, and your roadmap for getting your business up and running. You’ll need to outline the key indicators you’ll be tracking to make sure your business is headed in the right direction.

Describe the problem that you solve for your customers and the solution that you are selling.

It is always a good idea to think in terms of customer needs and customer benefits as you define your product offerings, rather than thinking of your side of the equation (how much money the product or service will bring in).

2. Market Analysis Summary Use this section to discuss your customers’ needs, where your customers are, how to reach them to deliver your product to them.

You’ll also need to know who your competitors are and how you stack up against them—why are you sure there’s room for you in this market?

3. Strategy and Implementation Summary Use this section to outline your marketing plan, your sales plan, and the other logistics involved in

5. Company and Management Summary In this section, describe the organization of your business, and the key members of your team. Include summaries of your team\s backgrounds and experience.

6. Financial Plan At the very least this section should include your projected Profit and Loss and Cash Flow tables, and a brief description of the assumptions you’re making with your projections.

You may also want to include your balance sheet, your sales forecast and a break-even analysis.

INVESTMENT NEWS 29

TRAVEL, CULTURE AND BOOKS

Better than Lion King?

by FRANCIS OCHIENG

own where we get familiar with the flora and fauna of the expansive (Kapiti?) plains. We are introduced to all kinds of animals and their relationship with human beings. I was intrigued by the lion and is cultural beliefs attached to it.

O

ne of the most interesting features of Muli wa Kyendo’s book, Kioko and the Legend of the Plains is the culture it portrays.

Reading through it is like going through the ancient cultures of two communities.

You begin with the culture of the people of Nzaui who we assume are the Kamba although they are not named in the book. The main character Kioko and the other names of this community are clearly Kamba.

Before Kioko starts off to search for a cow, he exposes a variety of cultural activities in which children in his community are or were engaged And then we learn a lot from Grandmother. She knows the fears and triumphs of the community. And what’s more, she is Kioko’s mentor. Everything Kioko knows—at least almost all is from Grandmother When he reaches the land of the Cattle we are immersed into the culture of this community.

Another significant aspects which is described is the flora and fauna. Kioko starts form the hills of Nzaui—I assume this hill is the one with the same name which is in Makueni and which

Cover of Kioko and the Legend of the Plains Author: Muli wa Kyendo Publisher: Syokimau Cultural Centre Imprint: Ushanga Books ISBN 9966-7020-0-8 Availability: Bookshops in Kenya www.amazon.com has a lot of myth and history of the Akamba people. And again it may not, because the real mountain lies in the plains while the one described in the book seems to close to the hills. Be that as it may, Kioko starts from the hills of Nzaui and tracks down to the plains in the trail of the warriors led by the father.

When he loses the warriors in the plains, Kioko is left on his

A writer and children book expert Megan Green whose review of the book is quoted says “This is an incredible story with a tight plot, a character any reader will empathize with, and a wonderful lesson...a tale that is steeped in culture, that illustrates a beautiful setting, and that shows how two cultures who previously thought they were enemies can live in harmony” In these aspects (information about cultures, flora and fauna) —and even in the storytelling, I would say, Kioko and the Legend of the Plains is superior to international stories such as Lion King which is also based in the Kapiti plains and tries to portray flora and fauna of this expansive and much written about plain. The superiority of Kioko and the Legend of the Plains lies in the fact that the author knows the area very well and can access cultural and community resources that foreign story tellers don’t have access to.

30 INVESTMENT NEWS

Times are changing — and for the better?

Recently I listened with excitement and wonder as a preacher urged his audience to make a vow with themselves to assist someone in need.

The pastor went ahead to discuss what he called the chances of living a virtuous life. He himself, he said, was in charge of bursaries in the church.

“I have never taken a bursary for my child! Yet I have children in secondary school and two in the university. Obviously they need bursaries.

But my conscience does not allow me to take anything for my children.”

He went ahead to explain how a friend had called him asking for help. “He wanted me to help because he thought I was rich. I told him I wasn’t. I advised him to do what I do—pray and work hard so that we can raise enough funds for ourselves and others in need.”

His audience keenly listened. To them, I am sure it was a new message in a country where even educated people are beginning to wonder whether corruption isn’t in the Kenyan genes.

The churches are full of thieving “men and

women of God.” At around the same time, I had listened to a well-known TV evangelist telling his congregation that the biggest sin is not giving money to the church. “God will open the door, look at your record, and the first thing he will want to see is how much you gave to church. Was it all you could afford or were you like Ananias, hiding a portion of what you should give?

“That day, no one will pass the gate if they made no contribution to the church. Even me as your pastor, I will not go there and say I am pastor let me pass. My record must be clean.”

It was a variation of the usual plant a seed story that the government recently outlawed on TV. By the way, that is one thing that I can say the government has done that has pleased me.

Not that I am against churches making money. Everyone who goes to church and listens to an inspiring sermon should pay just the same as anyone who goes to hospital. That way you encourage the church minister to do even more for you.