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Kenya: Startup d.Light Raises $18 Million For Expansion

July 2, 2019

Kenyan startup d.Light is never leaving any stone unturned in its quest to scale its business and expand its operations. The startup is the latest on the continent to raise funds. The solar kit solution has just received Sh1.84 billion capital injection from a consortium of lenders to help accelerate its growth in Africa.

A Look At The Funding

The investment came from two responsibility-managed funds: SunFunder, DWM, and SIMA.
The startup hopes to use the funds to expand its product line and enter new markets to reach more customers.
The new capital is coming barely a few months after three European government funds committed Sh4.1 billion into d.Light.
The company said the financing was organized by Inspired Evolution, an Africa-focused investment advisory firm specializing in the energy sector.

d.Light At A Glance

Although started by the Americans Sam Goldman and Ned Tozun, the Kenya-based startup provides solar-powered solutions — ranging from lights, phone chargers, radios, and even televisions — which are sold in over 60 countries.
In April, it opened a regional office and service center in Eldoret, Kenya as part of the company’s expansion strategy to reach and impact 100 million lives globally by 2020.
Located at KIPPS Plaza, Iten road, the office, and service center has been opening daily including weekends and public holidays.
The center offers sales services and after-sales services for d.Light’s products including solar home systems and portable solar powered lanterns.
The startup has 1,000 employees and 3,000–5,000 commissioned agents, is generating about $100 million of revenue a year, and experiencing 40–50% growth annually.

“Significant amounts of capital are required to enable us to continue providing these financing plans for our customers as we grow.

“We are thankful for the continued support of our funding partners to enable us to create a brighter future for the families we serve,” said d.light chief executive and co-founder Ned Tozun in a statement on Monday.

For the startup co-founder and chief executive Ned Tozun the funding by SwedFund, Norfund, and Dutch Development Bank FMO would give d.Light some new impetus to expand into new markets and increase product lines to reach more customers.

This Investment Is A Major Win For A Startup That Had A Humble Beginning

For a startup that started off struggling to raise funds, this is a big moment for it. Early investors in the startup did not believe investing in its high-risk, unproven proposal and hence were uninterested.

“I was someone who doesn’t like public speaking. I’m more of an introverted person; I was like a coder and stuff,” Ned told Forbes in a interview. “So, going out and pitching to venture capitalists, I was so nervous the first times. But, as with anything, if you do it enough, and if you really believe in the business that you’re doing, you’ll get better and better.”

This is after a series of rejection from venture capitalists too.

“You guys will fail. Please don’t waste your life on this,” one investor told them.

The startup came to its turning point when d.light won the Draper Fisher Jurvetson Venture Challenge and earned a $250,000 check from the well-known VC firm.

Image result for Cleantech funding in Africa — Source: World Economic Forum

Inspired by the win, Guy Kawasaki’s Garage Technology Ventures doubled their $250k winnings. Buoyed by this in-pouring of funds, Ned relocated with his wife to China to figure out how to build solar-powered solutions that were affordable, high quality, and at scale. At the same time, his co-founder, Sam Goldman, moved to India to figure out how to sell and distribute the products.

Today, more than a decade since starting d.light, the startup has raised a little over $100 million in equity and debt financing. This is roughly a 50/50 mix of both.

‘‘Having the brand name of Stanford really helped. So did meeting VCs lecturing at school, and cold emailing investors,’’ Ned said.

Of course, once those initial investments came in, fundraising became a lot easier for Ned and his team.

‘‘I always say that, as a founder, you’re swimming in an ocean full of sharks, the sharks being investors. Eventually, one of them is going to bite, and then everyone else will want to bite.

You just need to stay afloat until then. You need to topple that first domino, and then the rest will come,’’ Ned said in the interview.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Central Bank of Kenya Says Kenyans Abroad Must Bring Back Sh1,000 Notes

June 21, 2019

Kenya ’s Central Bank is issuing a serious last warning: no foreign bank will agree to take the old Kenyan Sh, 1000 notes. Hence, holders of such will have to bring them back to Kenya physically for conversion to the new currency.

”CBK Is Not Providing Any New Generation Bank Notes To Lenders Outside The Country”

The CBK boss said the regulator is also not providing any new generation bank notes to lenders outside the country to facilitate the conversion, arguing that this would defeat the goal of combating illicit money flows that have informed the move to demonetize the old Sh,1000 currency.

‘‘Anyone holding the old Sh1,000 bank notes outside the country will have to bring them back to exchange with the new currency before the October 1 deadline, Central Bank of Kenya,’’ (CBK) Governor Patrick Njoroge said.

CBK ruled out allowing any form of conversion of the old notes outside Kenya’s borders, indicating that the regulator had notified all foreign banks to stop recognizing the legacy currency.

“If you have the Kenyan currency and you happen to be outside the country, there is only one way to get value for it before October 1. You have to take a trip here and go through the procedures outlined in the gazette notice and subsequent releases,” said Dr Njoroge at a press briefing yesterday.

“You cannot convert it to any other currency out there, since this would defeat the process of demonetisation.”

Those coming into Kenya to convert their notes will follow the same procedures laid out for locals. Converting between Sh1 million and Sh5 million is happening at all commercial bank branches, where customers are expected to make declarations on the source of their cash.

Persons exchanging more than Sh5 million will need to get an endorsement from CBK, as will those exchanging more than Sh1 million but do not have bank accounts.

Dr. Njoroge added that the net has been cast wider to forestall efforts to clean dirty money in other jurisdictions that carry out significant financial transactions with Kenya.

Both the Bank of Uganda and the Bank of Tanzania Issued Notices Earlier This Month Freezing the Conversion of the old Kenyan Notes in Their Banks

Both banks have also advised their countries’ banks to subject all flows to higher due diligence processes.

The Kenyan shilling is commonly used to transact goods and services in neighboring countries, especially now that East African Community rules allow free movement of people and goods across regional borders.

Anyone holding the old Sh1,000 banknotes outside the country will have to bring them back to exchange with the new currency before the October 1 deadline.

The shillings find their way back home through the same trade routes, as well as official currency repatriation mechanisms between the central banks of the respective countries in the bloc.

The CBK has ruled out making an extension to the October 1 deadline for the demonetization process, saying that doing so would provide those looking to get rid of illicit funds a loophole to do so.

The new notes contain features that are identifiable by touch to accommodate the visually impaired, which cannot be put on a polymer note.

Taking into account the rough handling of Kenyan banknotes that produces rapid wear and tear, CBK applied varnish on the notes that will allow them three to five years of usage, 30 percent longer than the older notes they are replacing.

Polymer notes on average last two-and-a-half times longer than cotton paper, but are twice as expensive.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Startups in Kenya, Ghana and Tanzania Have Over $150 million New Fund

June 18, 2019

Kenyan startups have more investment opportunities in town. A Dubai-based equity fund, Nimai Capital has appointed Kenya’s Victoria Commercial Bank (VCB) to oversee the investment of its Sh1.5 billion in financial technology startups in Africa and Asia.

Here Is The Deal

The new fund is named the Nimai Emerging Financial Services Fund (NESF) facility and it will seek to benefit 1.7 million customers in Kenya, Sri Lanka, Bangladesh, Nepal, India, Ghana, and Tanzania.
However, only startups in the technology mobility-enabled emerging financial services opportunities including but not limited to banking, insurance, retail, and housing finance, microfinance will be able to access the funds.
The Fund will be regulated by the Cayman Islands Monetary Authority.

“The markets were chosen based on the existing (fintech) presence and experience. It integrates investment expertise with deep operational capability and resources,” said a joint statement.

Victoria Commercial Bank’s chief executive Yogesh Pattni termed the deal as an opportunity to deepen their relationship with Nimai Capital which recently gave out Sh1 billion kitty for onward lending to women-led enterprises.

Nimai co-founder and managing director Pankaj Mundra said NESF will benefit from VCB’s business experience and deep understanding of the Kenyan market.

“We look forward to working with Victoria Commercial Bank to source and develop investment opportunities for the Fund across East Africa,” said Mr Mundra.

What Is Expected of Interested Startups

To be able to access this fund, interested startups or investee companies under the Nimai Emerging Financial Services Fund must be startups with proven track records.

Inside The Growth of UAE Investments in Africa — Botho Emerging Markets Group

Successful startups will gain access to diaspora financial services, expert financial advice from line companies as well as have systems integrated with Fintech firms in India thereby enabling them to facilitate cross-border financial services.

“We have a firm belief that the fund will make a significant and positive impact in the lives of millions of families in addition to generating appropriate financial returns for investors,” said the statement.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Kenya: How Smallholder Farmers Can Benefit From The Newly Signed EU Bank ’s EUR 50 Million Deal For Smallholder Farmers

June 17, 2019

Good news for small-scale farmers in Kenya. This is a huge opportunity to benefit from the newly signed deal between the European Investment Bank and Equity Bank of Kenya. The two banks have signed an Sh5.7 billion (EUR 50 Million) deal to finance agricultural development in the country.

Here Is The Deal

In the deal with EIB, Equity Bank through the program termed Kenya Agriculture Value Chain Facility will provide smallholder farmers and small agriculture-based Small and Medium-sized Enterprises (SMEs) with credit to expand their operations.
Working with Equity Bank across the country, the new Kenya Agriculture Value Chain Facility will help agriculture companies to modernize and harness the full economic, employment and export potential of agriculture as well as expand business with local smallholders.
The European Investment Bank aims to extend the project to other financing partners in the future with a focus on service providers expanding their reach to rural communities and smallholder farmers.
Agriculture is the leading source of economic activity, employment, and exports in Kenya. Agriculture contributes directly and indirectly to 51% of Kenyan GDP and accounts for 60% of jobs in the country.

Who May Get The Loan?

The loan program is strictly for agriculture companies and ventures that intend to modernize their ventures as well as embark on agriculture projects that are capable of creating employment opportunities for Kenyans. Agricultural businesses that are also interested in expanding their venture capacities may also apply. The enterprises targeted include Value Chain SMEs in agribusinesses that are supporting a smallholder farmer base.

“Equity Bank has aligned its strategy with the Big Four agenda, which includes agriculture, and our focus is on growing the agribusiness portfolio through servicing all segments from retail to SME to large enterprises and corporate banking customers,” said Equity Bank Kenya Managing Director Polycarp Igathe.

Is The Loan Attractive Enough For Kenyan Small Scale Farmers?

The sum of £50 Million has been budgeted to make this happen. This is the first ever dedicated support for long-term investment by agriculture companies in Africa backed by the European Investment Bank, the world’s largest international public bank.

When procured, beneficiaries will have up to seven (7) years to pay back. This is expected to take care of the highly risky agricultural sector mostly affected by adverse weather patterns.

The maximum amount of loan to be procured by the beneficiaries is 50% of the project cost as long as the beneficiaries are eligible.

Presently, the duration of most loans in Kenya is 12 months. 7 years to pay back the principal sum is a big edge. The new funding would be made available in Kenya Shillings. This will mitigate exposure to foreign exchange risks that currently hinder agriculture investment in Kenya.

“It is good to see the European Union’s bank, the European Investment Bank, partner with Equity Bank. This is the first time the EU funds the private sector in the agricultural sector in Kenya directly. There is a great deal of expectation on this new approach. The EU chose it in Kenya because we recognize that smallholder farmers do not need handouts: they need an enabling environment to be successful market operators. This requires access to finance and reducing the risk of investing in a difficult environment.” said Walter Tretton,Chargé d’affaires of the European Union delegation to Kenya.

Which Bank To Get The Loans From?

Equity Bank is the only Kenyan bank to get the loan from, in the meantime.

Equity Bank is the first Kenyan partner to participate in the Kenya Agriculture Value Chain Facility and other financial institutions are expected to join later. Equity Bank is one of the key financial institutions supporting the agricultural sector in Kenya and is a leading provider of financial services to rural communities and smallholders, the EU bank noted.

The EIB also noted that Equity Bank has identified the potential for growth, by adding medium size and large commercial farmers to the Agriculture portfolio as well as focusing on the financing of the Agri-Food processing companies.

Since 2007, the European Investment Bank has made available one billion euros (Sh114 billion) for private sector investment in East Africa through credit lines in both local and international currency in partnership with more than 25 banks and financial institutions.

Equity Bank Now Has Branch In Addis Ababa Ethiopia

Small scale farmers and businesses in Ethiopia may also now benefit from Equity Bank’s line of credit. This is because the bank has set up a commercial representative Office in Addis Ababa, Ethiopia as it prepares to expand into the hitherto protectionist economy. The bank’s Ethiopia branch is expected to be fully operational next month.
The entry into Ethiopia, a country with a population of nearly 100 million people, follows the Government’s appointment of a privatization commission and the ongoing reforms which are aimed at promoting a growing private sector.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Kenya: $5m New Investment In Agri-tech Startup Twiga Foods Makes It One Of The Most Funded Startups So Far In Africa

June 14, 2019

African startups are not looking back. Kenyan agri-tech startup Twiga Foods has received a US$5 million secondary investment from France’s richest family, the Mulliez family, to support its growth, making it one of the top-funded startups in Africa for the year 2019.

The startup is one of the best-funded on the continent, securing a US$10.3 million Series A funding round in 2017 and a further US$10 million last November, and has now raised an additional US$5 million from the Mulliez family’s investment firm Creadev.

As part of the secondary transaction, early investors in Twiga Foods including Adolf H. Lundin Charitable Foundation, Blue Haven Ventures, Crescat Limited, Omidyar Network, and Index Ventures have partially sold their stakes in the startup as it looks to accommodate later-stage investors.

“Having Creadev join our shareholding is a huge boost to our mission to deliver safe, affordable high-quality food to urban consumers, while providing reliable markets for farmers. It will support our efforts towards growing our ecosystem of farmers and retailers,” said Twiga Foods chief executive officer (CEO) Peter Njonjo, who recently joined the company after 21 years at Coca-Cola.

Sarah Ngamau and Pierre Fauvet, Africa heads for Creadev, said they were proud to enter into a long-term partnership with Twiga as the startup answers a massive market need — the structuration and formalization of the food logistics supply chain.

“We are impressed by Twiga’s fast growth, driven by an experienced and result-oriented management team. We believe the appointment of Mr Njonjo as CEO is another proof of Twiga’s ambitions and willingness to grow to the next level,” they said.

“We will leverage on Creadev’s international retail network and future funding capacity to support the team in executing this ambitious expansion plan and continue delivering their strong value proposition to small-holder farmers, informal retailers, and end customers.”

What The Startup Does

Founded in 2014, Twiga Foods is a business to the business food distribution company that builds fair and reliable markets for agricultural producers and retailers through transparency, efficiency, and technology.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Kenyan Logistics Startup MPost Completes Pre-Series A Round of Funding

June 12, 2019

More startups in Africa are simply moving ahead of others, and faster. Kenyan logistics startup MPost is the latest to join this league.

The amount of fund raised by the startup was not disclosed, but the funding came from South Africa’s Cape Town-based VC firm HAVAÍC.

“We are excited that Havaic is investing in MPOST. As a seasoned investment and advisory firm, HAVAÍC will undoubtedly bolster MPost’s growth and impact in the region. This is a vote of confidence in our product and indeed our vision as a company,” said chief executive officer of MPostAbdulaziz Omar was quoted as saying.

The startup which has developed a patented technology allows users to transform their phone into a unique mobile postal address and mobile postal box.

“This partnership with Startupbootcamp, HAVAÍC and MPost will enable us to enhance the efficiency and user experience of the product, and improve the long term benefits to our clients and stakeholders,” said chief technology officer (CTO) Twahir Mohamed.

MPost At A Glance

The startup was founded in 2015 by Abdulaziz Omar and Twahir Mohamed. The startup allows mobile phone numbers of its users to be converted into official virtual addresses which will allow the users to be notified whenever they get mail through their postal addresses.

The startup has already gained 40,000 users, mostly as a result of its partnership with the Postal Corporation of Kenya. It has been primarily self-funded but obtained some angel investment last year. The latest round of funding comes from established investment and advisory firm HAVAÍC, which also plans to participate in MPost’s forthcoming Series A round.

HAVAÍC’s Rob Heath, the partner responsible for pan-African and international business at the firm said HAVAIC invested in the startup because:

“After spending time with Aziz and Twahir in Nairobi and seeing the solution in action, it’s clear that this is not just a technology and commercial product. MPost makes a real impact on people’s daily lives and as an investor, it’s rewarding when we can tie these two elements together. That being said, this is a great example of African problems producing global solutions — one of the cornerstones of our investment thesis at HAVAÍC.”

MPost is further moving to Uganda ahead of further launches in Rwanda, Botswana, Tanzania, and South Africa.

Last year, the startup participated in the Startupbootcamp AfriTech accelerator program in Cape Town, where it was introduced to HAVAÍC. MPost will also welcome Startupbootcamp AfriTech co-founder Zachariah George onto the board to represent both his business and HAVAÍC.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

What Kenyan Businesses Need To Know About The New Currency Policy In Place In The Country

June 11, 2019

As you would expect, the first implication of the Kenyan new currency policy (which is that the country’s currency would be replaced with a new generation of banknotes and that Kenyans must return their 1,000 shillings ($10; £8) notes to banks by 1 October, in a bid to fight money laundering, counterfeits, and corruption) is that many businesses would go in for it.

The new currency notes will be in Sh50, Sh100, Sh200, Sh500 and Sh1000 denominations. Although Kenya’s Central Bank Governor Prof Patrick Njoroge said the Sh50, Sh100, Sh200 and Sh500 notes will be phased out slowly, he has however insisted that:

“The emergence of counterfeits has become a great concern. All the Sh1000 notes were withdrawn by a gazette notice on Friday. Those in possession [of the bank notes] have until October 31, 2019 to release them,” said Prof Njoroge who urged Kenyans to have the notes changed.

Below are the implications of the change in this currency policy on Kenyan businesses.

By November This Year, All Those In Possession of The Old Ksh1000 Notes Will Not Be Able To Use Them

This is directive of the Central Bank of Kenya. Mr. Njoroge said the Central Bank of Kenya is giving all Kenyans in possession of the old Ksh1000 a four-month transition period in order to allow them enough time to change the old currency within their possession.

For Kenyan exchanging less than 5m shillings, they would be able to do so at their local bank but any amounts higher than that will need approval from Kenya’s central bank. Those are to seek approval from Kenya’s Central Bank include those without bank accounts and with over Ksh.1million of the old currency.

Another strategy would be to block all ways of exploiting the new policy. The bank is already in talks with managers of foreign-exchange bureaux and money-remittance providers to put in place controls to prevent illicit financial flows.

There is an alleged feeling of desperation among those suspected to be hoarding money acquired illegally and who are hence unable to bank it as they cannot openly declare its source. Such individuals are faced with the challenge of losing the money when it is devalued on 1st October as Kenya officially moves on to the new currency as is dictated by the 2010 Constitution, reports Kenya’s Investment Company Soko Directory

Commercial banks are expected to obtain confirmations from customers on the nature of their businesses that generate the respective large cash transactions.

Kenyan Shillings Can Be Used Once In A While In Uganda and Tanzania, But This Is No Longer Going To Be The Case

With this new policy, Kenyan businesses using Kenyan shillings to transact or do foreign exchange businesses in Uganda and Tanzania will not be able to do so again. Mr. Ngoroge has communicated to banks across the East African region where Kenyan shillings is often used as a legal tender to ensure that Kenya’s illegal money did not get exchanged in their countries. To this effect, the Bank of Uganda, Uganda’s highest bank has mandated all banks in Uganda to stop accepting Kenyan currency at the counter.
A statement from Uganda’s Central Bank said the move is aimed at boosting Kenya’s fight against counterfeits and illicit flows.

“The Central Bank of Kenya has informed Bank of Uganda that they have issued a new series of Kenya banknotes effective May 31, 2019…..in light of new developments, BOU will not accept Kenya shillings at its counters with immediate effect,” the notice reads.

The memo also said the new currency is only available in Kenyan banks.
The bank further directed all commercial banks in Uganda to subject all cash flows from and into Kenya to due diligence. The Tanzanian central bank has also stated the same.

The Change Will Most Likely Make More Money Available To Businesses. The Best Time To Borrow May Be Now

With the new move, expect previously hoarded cash to be collected back for redistribution. There are a total of 217.6 million pieces of 1,000 shillings in circulation in Kenya according to a statement by the Central Bank of Kenya (CBK).

The Kenya Association of Manufacturers is leading the pack of those Kenyans who see opportunity from this. KAM chairman, Sachen Gudka has been quoted as saying:

“This change is likely to redirect monies that are presently hoarded and funneled into funding illicit economic activities into the formal banking and lending structures to finance the production of real goods and services.”

He also believed that the move will give citizens a better purchasing power and push for higher demand and supply for local products, and as such boost positive legit businesses in the country.

There Is A Big Question On Whether The Design Of The New Currency Is Constitutional

Article 231 (4) of the Constitution of Kenya states that “Notes and coins issued by the Central Bank of Kenya may bear images that depict or symbolize Kenya or an aspect of Kenya but shall not bear a portrait of any individual.”

Activist Okiya Omtatah has since gone to court to block the new currency over the inclusion of the portrait of Mzee Jomo Kenyatta, contrary to the requirement of the constitution.

The Chief Justice David Maraga has been asked by the High Court to constitute a 3-judge bench to deliberate on the matter.

But the CBK governor has said that design was well within the Constitution’s directions.

Countries That Once Toed Kenya’s Footsteps

In 2016, India changed almost all of its cash overnight, which some critics claim caused long-term financial problems. The Indian government said it was a necessary move to tackle tax evasion and terrorism funding, and in a country where 90% of transactions are in cash, to move towards a cashless society.

Nigeria introduced a similar ban on old notes in 1984 in an attempt to crack down on corruption, as did Ghana in 1982 to help with tax evasion.

This may be a big-time signal for businesses in Kenya to consider storing their cash in foreign domiciliary accounts.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

KENYA: How To Access The New Loans Without Collateral For SMEs

May 21, 2019

SMEs in Kenya now have access to new loan facilities without collateral. About five Kenyan commercial banks are now backed by the Central Bank of Kenya to provide loan facilities targeting small businesses.

Under The New Loan Structure (Known as ”Stawi”)

Micro, small and medium enterprises (MSMEs) will be allowed to access loans without collateral ranging between Sh30,000 ($297) and Sh250,000 ($2500) from the new loan product dubbed “Stawi”.

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The loans will be accessed and processed through mobile phones.

Also Read: Importing Maize in Kenya is Now Duty Free

Unlike other mobile loans like that issued by Branch, you can request for a second loan if you have managed to pay 80% of the first loan you owe Stawi.

Interest And Repayment Period

The loans have a repayment period of between one year and 12 months and an interest of nine per cent (9%) per year.

Other charges to be collected upon disbursement are facility fees of four per cent, insurance cost of 0.7 per cent and excise duty at 20 per cent of the facility fee

Which Banks To Access The Loans From

The facility will initially be managed by:

Commercial Bank of Africa (CBA)
Cooperative Bank of Kenya (Co-op Bank)
Diamond Trust Bank Kenya (DTB)
KCB Bank Kenya
NIC Group

“We are excited to work with the five banks to minimise the complexity of developing new and more accessible loan offerings as they bring much-needed capital to this underserved yet vital segment of the market,” CBK governor, Patrick Njoroge, said during the launch of the product at Nairobi’s Gikomba Market.

Pay Back In Time And Get Cash Rewards

The scheme will also see good borrowers rewarded with cash based on their borrowing profiles.

“Small and mid-size enterprises are the lifeblood of any economy, but many have struggled to secure the necessary financing to continue operations in the current economic climate,” said Ngoroge

The latest intervention is coming after private sector credit grew just 3.4 per cent in the year to February In Kenya, well behind the Central Bank of Kenya’s target rate of 12–15 per cent that is needed to support economic development.

Kenyan borrowers were recently spared a rise in the cost of loans after the CBK retained its benchmark rate at 9.0 per cent amid mounting defaults and reduced appetite for lending to individuals and small enterprises by commercial banks.

How to Apply for Stawi Loan?

To apply for and get Stawi Loan, download the Stawi Mobile application on your phone(play storelinks will be shared when it goes live in Mid June 2019 ).

After downloading the mobile app, register with an agent and create your wallet and request for a loan. Your loan will be issued via your wallet.

To be among the 3500 traders who will benefit from the first round of Stawi loan that will be issued to SMEs on pilot test, register with an agent through any of the listed banks above.

Charles Rapulu Udoh

Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Internet Fraud Hits Kenya Hard – $300 Million Stolen

May 20, 2019

Internet fraud is hitting Kenyan businesses hard. The case was worst in 2018, according to a new report by cybersecurity firm Serianu.
Over Sh29.5 billion was lost to cybercrime and related activities last year as criminals stepped up attacks on banks, Saccos and government agencies.

Key Breakdown Of Facts And Figures

The funds were lost through direct theft or indirect expenses linked to cybercrime.

Financial institutions, such as banks, insurance companies, and micro-finance institutions were the most affected group.

Government agencies also topped the list of targeted institutions as criminals sought out critical personal data to exploit.

Also See: Kenyan Loan Guarantors May Soon Be Hard To Be Sued

KSh230 million was lost through personal computer fraud

KSh100 million through business emails — an attempt to trick someone into giving information over the Internet or by email that would allow someone else to take money from them.

KSh70 million through fake cheques, and;

KSh66 million in identity theft.

Sh97 million and Sh72 million was lost through hacking of transaction channels and identity theft respectively.

“From our survey, we estimated the cost of cybercrime in Kenya at Sh29.5 billion for 2018, which is 40 per cent increase from the Sh21 billion reported over a similar period in 2017,” explained Serianu Chief Executive Wiliam Makatiani.

Internet Frauds

While it seems a field day for the internet fraudsters, one important point to note here is that it appears that instruments of law, policies and regulations are proving less effective in the efforts to check online frauds in Kenya.

Just in 2017, the Central Bank of Kenya issued a guidance note on Cyber Security to public institutions.

Among other things, the guidelines provide for the minimum requirements for businesses to prevent cybercrime, one of which is interestingly, that the members of the board of a company should understand cybersecurity matters and possible threats to the business.

Boards of companies are also expected to establish or review cybersecurity risk ownership and management accountability and assign ownership and accountability to relevant stakeholders; the coverage should include relevant business lines and not just the IT function.

The Central Bank of Kenya also demands that companies perform regular checks to ensure they are safe from cyber theft.

And it doesn’t seem the institutions in Kenya have failed to comply.

In fact, the report said that financial players, including banks, insurance companies and Saccos, spent Sh6.4 billion on protective measures.

Government agencies and private service providers, including telcos and sports betting companies, on the other hand, spent Sh5.9 billion and 4.8 billion respectively. According to Serianu, while more companies are reporting cybercrime attempts and even losses, many cite the lack of adequate personnel as the biggest challenge to complying with industry standards.

(c) ResearchGate

Earlier in 2019, Kenya’s Directorate of Criminal Investigations (DCI) released the names and faces of more than 100 individuals linked to the theft of millions of shillings from several commercial banks in Kenya.

Communications Authority of Kenya (CA)’s data shows that cases of online theft aimed at both individuals and institutions over the last quarter of last year increased by 168 per cent.

Malware attacks recorded a 400 per cent increase from 1.8 million between July and September last year to nine million recorded between October and December, with a majority of cases targeting smartphone users.

“The quarter saw an exponential increase in the number of malware attacks as well as the number of misconfigured systems,” said the CA in the latest sector statistics report.

Charles Rapulu Udoh

Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

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Importing Maize In Kenya Is Now Duty Free

May 18, 2019

Ugali may soon be running out in Kenya, a huge chance for Kenyan importers. Kenyan government is going ahead to wave the magic wand by calling it an end to import duties on maize in Kenya.

For the government, the strategy is to waive 50 percent duty imposed on imported grain from outside East Africa Community region, to avoid last minute rush to plug the grain shortage that has seen the price of flour rise by 30 percent in one month.

For the Kenyan entrepreneur, the strategy would be to rush and invest in this direction before the government changes its mind.

Image result for Maize production chart Kenya 2018 — **Kenya’s Agricultural Production Sales: Annual: Maize from 2002 to 2017 in the chart:**

When Are Kenyans Expecting This Change?

Soon! From July, 2019, the duty-free maize import window opens.

“We are watching the situation closely to ensure that proper mechanisms for importation are put in place to avoid being caught unawares,” Kenya’s Agriculture Cabinet Secretary Mwangi Kiunjuri is quoted as having said.

At the moment, Kenyans can go all the way to potential maize markets in Rwanda and Mozambique where maize is selling at $288 and $290 per tonne, respectively, and begin the bargain in time.

Kenya’s Import Duty Reduction Is Also An Opportunity For Malawian Entrepreneurs — It’s A Game of Chess

The pressure is on Malawi to open its borders right now. In the 2016/2017 harvesting season, the Malawian government imposed a ban on maize export in Malawi. This cost Malawi K69 billion in potential export revenue, according to a study by the International Food Policy Research (Ifpri) published December 2018.

Grain Traders and Processors Association of Malawi therefore says the move by Kenya to remove duty on maize imports gives local traders in Malawi impetus to negotiate the lifting of maize export ban.

Image result for Malawi Maize production chart — **Maize prices improving for Malawi farmers**

The Malawian government appears to have understood the bad game of freezing its maize stocks for export. Malawian Minister of Agriculture, Irrigation and Water Development, Joseph Mwanamvekha, has said that lifting the maize export ban could be the only option government needs to look at amid a projected 355 000 metric tonnes (MT) maize surplus this year.

He said government can only open up the borders once it has procured enough stock for the reserves as well as for Agriculture Development and Marketing Corporation (Admarc.)

Restrictions on staple foods or cash crops is a strategy governments in developing countries use to promote food security or industrial development goals.

Charles Rapulu Udoh

Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.