Businesspeople in Busia County have been urged to ensure they understood the terms of the loans before borrowing.
Speaking during a client education forum in Busia, Patricia Nalianya from Demulla, a money lending organisation, said understanding the requirements and need of a loan will help the businesspeople to expand their businesses.
“Business people should consider the interest rate of the loan, the amount of money to be taken, and the timeline and pattern of the loan repayment. This will enable them to apply for loans that will help them to expand their business,” she said.
Nalianya also highlighted the importance of compliance with the law and regulation, as this will help in making their business credible.
‘A compliant and registered business is likely to be credited, unlike non-compliant. It also gives one a competitive advantage, as the business will withstand the risk of being closed down for failure to comply. The business will be in the good books of the government and creditors, as it will make it authentic and credible,” she said.
She added that to manage loans effectively, business owners must understand their cash flow and profit margins, adding that this knowledge helps them to determine how much they can afford to borrow and how they will repay it without straining their business operations.
“Many business owners fall into the trap of borrowing from different sources without a clear repayment plan, which can result in financial strain and difficulties in meeting repayment obligations. Borrowing wisely ensures that a business owner can comfortably pay back the loan without undue pressure,” she said.
She said Demulla has a total of 600 business people in Busia who were borrowing and paying their loans with the organisation.
“We always conduct client business forums to help them with the measures they can use to improve their business and share the new business ideas and opportunities in today’s business environment.
We also encourage them to improve customer relations and record keeping to realise the profit in their business,” she said.
The businesspeople who participated in the forum led by Rosebella Shiranda said the organisation has helped to grow businesses through loans.
“I operate a spa which has grown from a saloon, and this has been enabled by borrowing and repayment of the loans. Currently, I have employed six people through this business who fully depend on it for their livelihood.
My advice to the youth is that we can start from a small business and take loans to expand the business and ensure you pay to increase the borrowing limit.” She said
Hendrica Munyaho, another business lady, urged women to engage in business activities so that they can develop and help to grow their families economically.
By Rodgers Omondi and Faith Nalwenge
