Starting a business is expensive so is running and expanding one. Doesn’t matter what type of business it is. Today we will gather insights on loan business ideas in Kenya.
Having a loan business is one of the profitable businesses in Kenya. Everyone requires extra money when they run low on cash.
What is a loan?
It is a sum of cash an individual or organization gives out to an individual or organization.
Afterward, they expect to get it back with an interest agreed upon on terms and conditions.
It is crediting a debtor with aim of getting it back with an interest.
How does the loan business work?
It is a two-way transaction in that a debtor must borrow and the creditor agrees and gives terms and conditions of the loan.
The debtor accepts the terms gets the loan and later pays the loan including the extra charges and due fines when they delay payments.
How to start a loan business
1. Find a business name
This is the most important even before you start planning. The name will be responsible for selling your brand to the customers.
Have a name that is catchy and describes what the business is about.
2. Have a plan
This is the structure you will use to run the business. Also one may need to hire a loan processor, bookkeeper, and debt collector.
But as starting up you can do all this by yourself but you need to be extra careful.
- Form a legal entity- this establishes your business that has rights and obligations it also shows that your business is legal.
- Register for taxes- this is important because the taxes improve the business world by the Government.
- Have a budget- it indicates how the finances are allocated and how much is planned for what.
3. Find finances
These finances are to be used to register your business as well as starting up. They will also be used to cater for miscellaneous activities.
Money is the asset that one requires to begin, grow and maintain the business.
4. Register your business
This means visiting the eCitizen portal and filling out forms for your business. Also, involves paying transaction fees to get permits and licenses.
- Get the right licenses and permits- make sure the license and permit to get covers your business, you don’t want to begin a business and get shut down.
5. Get business insurance
Insurance is a contract bounded by a policy meant to protect the business in cases of financial losses or reimbursement against losses from an insurance company.
Having business insurance makes sure you can get back on track when it suffers a financial loss or destruction.
6.Set up a bank account
Having an account helps keep the business assets safe. When put in the same personal account they might end up being in use somewhere else instead of assigning to the business.
7. Have a business accounting management
This means having an auditor who checks the books. This protects the business from going bankrupt for overusing assets.
It also establishes if you are running on credit or debts in the business. It also helps one plan ahead by looking at the spending habits.
8. Establish web presence
This is a platform to help you reach out to your clients and also post updates. One can use it to post terms and conditions and FAQs of operations.
Get also to advertise the services you offer and post listings for jobs and other important business activities.
9. Market your brand
This involves using social media, banners, pay per click and SEO marketing as well as web content creation. This increases awareness of people and drives them to your site.
This is the final step. This is launching operations and allowing clients to transact and interact with the business.
It also involves adding other stakeholders and business partners that will help grow the business.
Loan business ideas in Kenya
Have you launched your
Having the right people will help promote the business. It also makes sure that the business runs smoothly and fast.
Here is who to lend to and why:
1. Loan business ideas in Kenya: Teachers
They require money in their day-to-day activities. Also, they have other ventures outside the teaching career, and often salary is not enough.
Teachers also tend to manage their finances better. Once they get a loan they can venture into other businesses and can pay fast.
2. Loan business ideas in Kenya: Small businesses
These people are also the right clients; this is why:
- They require money in day to day activities like buying products, transporting the product, and other fees.
- They also get money daily- from sales and services rendered they can be able to pay for the loans easily.
3. Loan business ideas in Kenya: Boda Boda guys
They are mainly responsible for transport and other services. These people are always around money and making them your clients can profit you.
This is why:
They do need extra cash maybe to repair their motorbikes or for personal benefits. Since they are always around money, they can pay their loans on time.
Now that you have the loan business ideas in Kenya, how do you manage them?
Having the above clients is a bit tiresome to manage. However, here is software to help ease the process. Software?
Yes; Introducing Jisort:
Jisort is a web-based software that automates transactions for Microfinance Institutions, SACCOs, Banks, Cooperatives, Credit Unions, Lending Organizations, and other financial institutions.
Jisort system is used to manage their clients’ information, keep track of their transactions and generate reports and business statements.
Being up and running for over 6 years it offers an alternative real-time integrated banking channel that allows Financial Institutions to offer banking services with minimum cost.
Well, Jisort helps you do the following:
- Get generated reports- the system generates reports on how the business has been doing and the transactions that have been done.
- Automate transactions- Accept and issue loans at comfort without having to go through many processes.
- Get alerts- whenever a client performs any transaction you will be informed.
- SMS Module- this will help to reach out to clients and alert them whenever the system updates are done or are changing.
Here is a demo of the system;
- It’s easy to know the number of clients you got, the completed loans, pending loans, and active ones.
- Also, get to see the client list, as well as search for them in the search bar.
- It’s also easy to export data too.
- Also, get to see how your resources are doing through the income and expenses graphs.
The system pricing is:
This system is affordable and simple. Besides, one doesn’t need special skills to operate it.
Get the Jisort system now.
The loan business is a good way to earn an extra coin from giving money. However, this business needs to be managed well to be productive.
The business also needs plans and strategies and records. These will help keep the business on track and give information on how the business is doing.