Access to affordable financing is a vital pillar in business growth and success. Recognizing the significance of this, KCB Bank launched the Boresha Biashara Loan. The loan emerges as a lifeline saver for entrepreneurs aiming to improve and boost their businesses.
The Boresha Biashara Loan’s primary focus is empowering entrepreneurs to contribute to local economic development. It achieves this through flexible loan limits and competitive interest rates.
In this article, I’ll guide you through the features, benefits, and impact of the Boresha Biashara Loan. I’ll explain why this loan program sheds light on small business growth and prosperity.
Overview of KCB Boresha Biashara Loan
The KCB Boresha Biashara Loan is a product of Kenya Commercial Bank that provides small business owners with funds to support or boost their businesses. You cannot use the loan as capital but for the growth and development of an already-started business.
The term “Boresha Biashara” translates to “improve your business” in Swahili, reflecting the loan’s objective of enabling business owners to enhance their operations, expand their market reach, and increase profitability.
KCB Bank designed the Boresha Biashara loan to address the financing needs of entrepreneurs in various sectors, such as agriculture, manufacturing, retail, and services.
KCB Bank’s aim in launching this loan was to bridge the financial gap between the problems that small to medium-sized enterprises face and access to funds from financial institutions.
Entrepreneurs with access to these funds can invest in equipment, inventory, marketing, working capital, and other growth-related expenses.
Although we’ll dive deep into the specifics later on, it’s important to note that terms and conditions for the loan vary depending on the applicant. However, KCB Bank assures borrowers that the loan’s primary focus is affordability, flexibility in interest, and personalized support.
Benefits of Boresha Biashara Loan to Small Business Loans
KCB Boresha Biashara loan helps entrepreneurs achieve their business goals and continue playing their crucial economic role. Here is how small businesses benefit from the loan:
No. 1: Access to Affordable Financing
The KCB Boresha Biashara Loan’s primary focus is ensuring that small businesses can access affordable financing options. The loan has a 13% interest rate, a 3% negotiation fee, and a 0.85% insurance fee. These rates make it easier for entrepreneurs to borrow funds without burdening costs. As a result, they can invest in their growth and expansion without straining their financial resources.
No. 2: Flexible Repayment Options
The loan program offers flexible repayment options of up to 36 months, tailored to small businesses’ specific needs and cash flow patterns.
Depending on your business cycles and revenue streams, the bank offers repayment terms, such as monthly, quarterly, or annual installments.
The flexibility of the Boresha Biashara loan enables the entrepreneur to manage cash flow effectively and repay the loan without undue pressure on their business operations.
No. 3: Support and Guidance for Business Growth
Budding entrepreneurs need funding, business advisory services, and mentorship programs.
KCB Boresha Biashara loan offers exactly that through experienced professionals on crucial topics such as business planning, marketing strategies, financial management, and other aspects of business growth.
The support can be invaluable for small business owners in optimizing operations and maximizing chances of success.
No. 4: Flexible Loan Limits
The Boresha Biashara Loan offers flexible loan limits with a maximum loan amount of Kes. 1,000,000.
Access to a substantial capital injection to fund various business needs can go a long way toward allowing borrowers to address different financial requirements, such as purchasing equipment, expanding their premises, increasing inventory, or investing in marketing campaigns.
KCB Boresha Biashara Loan Target Audience and Eligibility Criteria
The KCB Boresha Biashara Loan primarily aims at small and medium enterprises (SMEs) that require financing to support and expand operations.
The loan caters to various sectors, including agriculture, manufacturing, and retail, among other services. Also, the target audience includes individuals starting a new business venture who need capital to establish their operations and cover initial expenses.
KCB Bank stipulates several requirements to be eligible for the Boresha Biashara loan. The bank needs you to:
- Have a 6-month banking relationship with KCB Bank.
- Be in business for a minimum of one (1) year.
- Demonstrate ability to repay the loan using business cash flow, earnings, etc.
- Proof of security: The bank needs security for the Boresha Biashara loan. For an amount up to Kes 500,000, you can secure the loan using a guarantor, household, and business assets. On the other hand, if the loan exceeds Kes 500,000, security should be a Title deed, Cash cover, livestock, log book, and shares.
- Credit life insurance against death or permanent disability.
- Business registration: The bank may require a copy of your business permit or incorporation certificates. The permits show compliance with local regulations and authorities.
- Proof of Business Ownership: More often than not, the bank may require that you provide documentation to verify you own or are a partner in the business.
- Creditworthiness: The owner or partners in the business must demonstrate a positive credit history and repayment capacity.
- Business stability and profitability: The primary reason why KCB Banks demands that your business be in operation for at least one year is to gauge your profitability. The more profitable a business is, the higher your chances of loan approval are.
NOTE: The eligibility criteria may differ, and the bank may need more requirements before approving your Boresha Biashara Loan application. However, the above-indicated conditions are the most common.
Check the KCB Bank website and fill out the inquiry form for more information on any additional requirements. You can also visit a bank branch for help on whether you meet the eligibility criteria. But I’ve expounded more details on this in the application process below.
KCB Boresha Biashara Loan Application Process
The Boresha Biashara loan application process involves mainly five steps. I’ve comprehensively covered the KCB loan application process in a different guide you can check out. But they include:
Step 1: Initial Inquiry
The first step in the Boresha Biashara loan application process is showing interest. Various channels to do this step includes reading this article (like you’re now), contacting KCB Bank customer care, visiting a bank branch, or submitting an online inquiry.
Step 2: Gathering Required Documents
During the inquiring step, the agent provides you with a list of documents to submit during the loan application process. In this step, you collect all the needed documents and file them.
Step 3: Application Submission
Your assigned KCB bank agent provides you with a loan application form that collects all essential details about the business, your personal information, the requested loan amount, and the desired repayment terms.
Step 4: Bank Review and Evaluation
Once the bank agent files your loan application, the bank conducts a thorough internal review. Many factors about your business and loan application are considered, including credit history, business viability, repayment capacity, etc.
Step 5: Loan Approval and Disbursement
The bank will either reject or approve the loan application once the credit assessment is complete and successful. If approved, the bank notifies you and invites you to check the terms and conditions. Once you agree and sign up to these terms, the bank disburses the loan amount to your account.
Step 6: Loan Repayment
Going forward, you must repay the loan based on the agreed schedule. Repayments often involve regular monthly installments.
KCB Boresha Biashara loan application process takes seven business days. Following the outlined application process, you can submit your application, undergo evaluation, and potentially secure the Boresha Biashara Loan to support your business growth and development.
Potential Limitations or Drawbacks of the Loan Program
While the Boresha Biashara Loan offers numerous benefits, its potential limitations or drawbacks must be noticed. These limitations of the Boresha Biashara loan program include the following:
No. 1: Eligibility Requirements
The eligibility criteria for the Boresha Biashara Loan require you to be in operation for at least one year. This requirement may be stringent and result in some budding entrepreneurs needing access to the loan.
No. 2: Collateral Requirements
The Boresha Biashara loan indicates varying collaterals depending on the loan amount. The stipulated security for the loan can be a barrier for borrowers needing sufficient valuable assets to serve as collateral. In addition, a lack of collateral can limit the loan amount available to borrowers or result in outright denial.
No. 3: Limited Loan Amounts for Some Businesses
The Boresha Biashara Loan offers flexible loan limits of up to Kes. 1,000,000, the amount may need to be increased for some businesses. Some businesses may have larger financing needs and, as a result, explore alternative financing options.
Conclusion
The KCB Boresha Biashara Loan offers numerous benefits, making it a valuable financing option for small businesses. Its flexible loan limits of up to Kes. 1,000,000 and flexible repayment options provide entrepreneurs with substantial capital to support business needs while ensuring they can manage their repayments.
While the Boresha Biashara may be lucrative for entrepreneurs, you can still explore other loan options. Other loan options from KCB that you can explore include the Jaza Duka loan.
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