In this article, you are going to learn how to start a lending business in Kenya.
In fact, these are the same steps used by the likes of Tala to operate their business within the country.
Why would you want this?
It is estimated that there are over 50 mobile-based lending platforms in Kenya. How?
Well, the industry has been ballooning ever since MPESA came into the picture back in 2007.
This was followed by the first-ever mobile loan in 2012 through MPESA platform.
From here, things skyrocket, and now we have personal lenders sprouting up left to right.
Why would you lend out your money?
To make more money of course!
Mobile lending in Kenya has proved to be so profitable.
Take Fuliza for example;
Kenyans borrowed over Sh245 billion in the 2020 Financial Year, compared to Sh29 billion borrowed the previous year.
And the numbers are increasing!
What does this tell you?
There exist an appetite for loans in Kenya, and that is why you are here to learn how to start a lending business in Kenya.
Later on, I will introduce you to a system you can use to seamlessly manage all your loan payouts.
It is a tool that removes the guesswork and paperwork from this lucrative business in Kenya.
Starting a personal lending service in Kenya is just like any other business.
You first have the idea (in this case, lending money to friends). And with the idea, you start surveying the market.
By doing so, you are trying to get an understanding of the market. You know, things like the age, income sources and size, and of course, their occupations.
We are going to cover that in a minute.
Before that, you also need to take care of the legal part.
There are two things here;
First, you need to make sure that your business is operating within the law.
And secondly, make sure your money is safe.
Here are the things you need to start a personal lending business in Kenya;
Now, with these things in place, let’s see the steps you can take now to start a lending business in Kenya.
It doesn’t matter whether you are starting a micro-finance institution or operating a personal lending service under another business, you need a plan.
A plan helps you identify opportunities and get a clear picture of where you are going and what you need to do to get there.
Without a plan, you are planning to fail.
If you will be moving things upscale, you will need to be on the right side of the law.
Take any licenses and registrations necessary to start and operate a money lending business in Kenya.
Besides, having a legal entity shields your personal assets against lawsuits that may come your way.
You need to register with the taxman.
Head over to the KRA portal and start the process.
This isn’t necessary if you are operating undercover.
But when things get serious, you need a separate business bank account. This separates personal assets from the business’
You need a system to keep things seamless.
Remember, you will be dealing with hundreds of clients and other business needs.
When that happens, you need a system dedicated to simplifying these operations.
Luckily for you, such a system exists in Kenya.
Yes, Jisort is a lending management platform, helping you remove all the complex tasks out of the way. We will talk about it later.
What happens when you have to write off loans?
You need insurance to operate both legally and with peace of mind.
Branding puts you out there and helps you attract the right target clients.
Get things like logos, websites, and social media presence sorted.
Again, you need a website in Kenya to build trust.
Also, a website enables you to generate leads on autopilot.
If your target market is fashion boutiques, you can publish an article targeting them. Include a lead-magnet where they need to provide their email and names to download it.
From there, you can start nurturing these leads.
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We’ve brushed about Jisort somewhere within this guide.
It is a lending platform in Kenya you can use to operate your entire business.
From the screenshot above, you can see you’ve got everything you need to run the lending business under one dashboard.
Jisort gives lenders like you the following features:
Try Jisort now for free.