OIL SECTOR BRIEF

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On the 28th of May, the Kenya Business Guide launched its second Sector Brief on Oil at the Kenya Extractives Policy Dialogue hosted by the Strathmore University Extractives Industry Centre and Extractives Baraza in partnership with National Oil, Oxfam, DFID and ESAL.

The need for a structured dialogue on local content in Kenya has been incentivized by the discovery of oil and other commercially viable minerals, a key focus being to promote in-country value addition through four main pillars: local employment opportunities, in-country spending and procurement of local goods and services, technology and skills transfer, and local participation through equity and management.

The event brought together key stakeholders around the oil & gas sector to discuss these pivotal issues as the country moves closer towards the point of oil exportation. Sahil Shah, Project Lead of the Kenya Business Guide, opened up the seminar with a presentation of the oil sector in Kenya drawing on the Sector Brief developed and published alongside the Strathmore University Extractives Industry Centre.

The brief provides an outline of the oil sector and an analysis of its significance to economic growth and development in Kenya, debunking some of the assumptions and misplaced expectations of what value the sector actually holds for the country.

The Sector Brief on Oil can be found here.

Sources: http://www.oilnewskenya.com/kenya-business-guide-launched-second-sector-brief-oil-kenya-extractives-policy-dialogue-hosted-strathmore-university-extractives-industry-centre-extractives-baraza-part/

MSME DEVELOPMENT POLICY BRIEF

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On the 3rd of May 2018, Kenya Business Guide (KBG) in partnership with Kenya National Chamber of Commerce and Industry (KNCCI) and the Strathmore Business School (SBS) hosted a policy breakfast on Micro, Small, and Medium Enterprise (MSME) Development.

After the welcome breakfast, remarks, and a Keynote Address from Angela Ndambuki (CEO, Kenya National Chamber of Commerce), Sahil Shah (Project Lead, Kenya Business Guide) opened the event with an informative presentation on MSMEs and presented a five-point policy framework for MSME Development in the country. Presently, MSMEs represent an untapped source for economic growth, social transformation, and employment generation in Kenya. Therefore, there needs to be concerted effort and collaboration among key actors, players, and stakeholders to share information and insights for the sustained development of this sector. An integrated approach is needed, which is connecting the five-point policy framework: information and awareness, legal and regulatory environment, access to finance, capacity building, and supporting infrastructure. Each of this five-point policy framework was represented in the panel discussion by an expert. The panel discussion podium was joined by Alex Owino (Metropole Corporation), Ken (Wachira – Rodl& Partner), Mungai Munene (Capital Operating Partners), Prof. Robert Mudida (Strathmore Institute of Public Policy and Governance), Sahil Shah (Kenya Business Guide), and Patrick Wameyo (Entrepreneurship Center East Africa).

The Kenya Business Guide is looking forward to hosting further events in partnership with the KNCCI and SBS. Follow this link for more information on the five-point policy framework.

Rodl & Partner ‘Start-up-to-Scale Up’ SME Convention

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On the 12th of April 2018, Rodl & Partner – a trustee of the Kenya Business Guide, hosted a convention entitled ‘Start-Up to Scale-Up’ aimed at bringing together leading voices in SME Development and business scale-up to have a conversation around improving prospects for Kenyan start-ups. Read more

MSME Development Working Policy Framework Launch

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On 29 March 2017, the Kenya National Chamber of Commerce & Industry (KNCCI) launched the Working Policy Framework towards Micro, Small & Medium-sized Enterprises (MSMEs) Development in Oil & Gas Counties and officially handed it over to the PS Ministry of Industry, Trade and Cooperative Betty Maina and the Council of Governors for implementation. Gracing the event was Kenya Business Guide, which works directly with KNCCI technical team and executive committee in the development of research and policy documents.

This framework will assist the country come up with mechanisms that will assist micro, small and medium-sized enterprises transform the short-term benefits of oil and gas sectors into long term development, industry stakeholders said during the launch. The Kenya Business Guide directly contributed to the document’s contents through the co-development of the five-point policy framework for MSME Development that the KNCCI co-opted into this particular framework for the Oil & Gas Sector.

A Policy Brief providing a general overview of the MSME sector in Kenya and highlighting the working five-point policy framework for MSME Development will be released by the Kenya Business Guide, Strathmore Business School and the Kenya National Chamber of Commerce and Industry in April 2018.

 

 

SBS, KBG Partnership to Advance Intersectoral Dialogues for Business Growth

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Leveraging on data across various sectors is pertinent in identifying and creating intersectoral collaboration opportunities. In view of this, Strathmore Business School, A premier institution which seeks to build capacity and enhance Africa’s economic growth through the provision of quality Leadership and Management executive education, in collaboration with Kenya Business Guide, a private sector thinktank that seeks to support the improvement and strengthening of the business environment in Kenya, collaborated in the development of multi-sectoral policy briefs.

These policy briefs are targeted towards transmitting knowledge to prospective local and foreign businesses and established entrepreneurs as well as key actors within the policy space including Business Member Organisations and relevant Government agencies.

The partnership seeks to spearhead intersectoral dialogues as defined by trends arising from the growth and development of the various sectors. The partnership endeavors to periodically release sectoral briefs which will guide and give insights into emergent patterns influencing the business environment.

Dr. George Njenga, Dean, Strathmore Business School acknowledged the critical role played by research and authentic data in informing business patterns and decision making. Welcoming the partnership and the opportunities to collaborate, he emphasised on the need of translating information from the industry into wisdom which can be furthered by research and used by multiple stakeholders. “We are developing a Data Center which will not only store data but also offer analysis. We are glad to be working with Kenya Business Guide in translating data into knowledge,”

Kenya Business Guide’s Project Lead, Sahil Shah shared his sentiments which resonated with the need of establishing authentic research which can transform all sectors. “Partnering with Strathmore Business School is indeed a great milestone in transforming the business environment in Kenya. Through this partnership and our collaborative works with all the 47 chapters of the Kenya National Chamber of Commerce and Industry, we are confident that we shall be able to gather data and translate it into palatable knowledge that can be used to identify and tap into a variety of growth opportunities.”

Strathmore Business School in collaboration with Kenya Business Guide held its inaugural sectoral brief public lecture on 7th December 2017, giving an overview of the current trends in the agricultural sector – an analysis of its projected growth trajectory.

Kenya Sustainable Development Forecast Workshop

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Participants keenly following the workshop’s proceeding

 

In the month of March, 2018, Kenya Business Guide (KBG) in partnership with the Institute of Security Studies (South Africa) held a week-long workshop titled “Kenya Sustainable Development Forecast” in Nairobi, Kenya.  This year KBG, ISS and GIZ will launch a report titled “Kenya Development Forecast: Key Trends to 2030 and Beyond”. The joint project will assess the projected scenarios and progress towards the adoption of the National Development targets, the Sustainable Development Goals (SDGs) and Policy Priorities. Through the workshop, KBG, ISS and GIZ would be able to validate the information, collect additional information and establish buy in.

The workshop consisted of five sessions with in-depth and extensive discussions held on current and future trends of Kenya’s economy in the following key sectors: Demographics, Agriculture, Environment, Economy, Energy, Infrastructure, Governance, Health and Education. Round table discussions were held during each session and participants comprised of experts and key stakeholders from the various sectors. Discussions touched upon the content of the report with a focus on how the report will contribute to the achievement of sustainable growth and development, importance of local contextual issues/ considerations, and the need for continued inclusion of key stakeholders, actors and champions.

Information and feedback collected from the workshop will be integrated in the second draft of the report with a hope of increasing its utility among a diverse group of stakeholders and actors. Keep visiting the website for more updates and details on the launch of the report, and how you can be a part of it.

What you Need to Know about Shylock Business in Kenya

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”So he will always come back from his pound of flesh,” Shylock  refers to the business of lending money for outrageous interest rates.It’s origin is drawn from Shakespeare’s, “The Merchant of Venice.” This high risk business has gained popularity over the years ,that those who practice it are easily reach compared to before.Though, not everyone who practices it knows the legal side of it,and other practices involved .So, how does the entrepreneur relate to the customers?On the other hand how do customers relate to sharks?What does law say about it?Most people really do not know why Sharks exist and how they operate,before you get involved do not miss out on the following key aspects;

Why is shy-locking a booming business

Money -lending business flourish because

  • Shylock has much lower interest rates compared to banks
  • They allow a negotiable loan repayment days.`
  • To borrow from a bank one needs a good credit history while,Shylock does not require any history on money borrowing from a client
  • It is safe for defaulters listed by CRB
  • The transactions are quick and requirements are minimal
  • Quick loans loans for business startups and personal needs(offers instant monetary fix)
  • The customer chooses the security or guarantors to give to the shy-lockers.

The risks involved in money lending Business

  • Default debts
  • Non-registered  micro finance businesses are not protected by law
  • Instances where the trust the loan is given on Trust gentleman’s agreement,where the client does not offer security the shy-locker goes to a loose in case of defaulting.
  • Clients may give  stolen or faulty items as security.
  • Borrowing becomes addictive
  • Making friends with the police to scare defaulting clients
  • Cunning clients who give false information about themselves,hence cannot be traced.

What the does the law say about Micro finance business

Most Kenyans have lost their property through Shylock ,and did not how the law can protect them.Since shy-locks in Kenya refer to their business as micro-finance,has the law challenged them yet, on this matter?

  • Contract law-Chapter 23 (3) of the Kenyan Law ,”any debt must be in writing to be enforceable.  Chapter 23 (2) (2)  “no contract in writing shall be void or unenforceable by reason only that it is not under seal.” Hence,most shy-locks provide poorly sketched contracts to clients when they lend out money.
  • Micro-finance Act of 20o6-In Chapter 19 Part 1 (2) of the Micro-finance Act of 2006, a “micro-finance business” is defined as anyone engaged in lending or extending credit at his own risk, “including the provision of short-term loans to small or micro enterprises or low income households and characterized by the use of collateral substitute.” The Micro- finance Act also requires anyone conducting this kind of business to be licensed. In Part II Section 9 (1) (c) of that same act, it states that a license can be revoked and the business shut down if the business being conducted is “detrimental to the interests of its depositors or customers.
  • Licensing-Chapter 19 Part II (4) (1) provides that “no person” can operate as a micro -finance business unless such a person is registered as a company pursuant to the Companies Act and licensed through the Central Bank of Kenya. The penalty for noncompliance, as provided in Chapter 19 Part II (4) (2) is “a fine not exceeding one hundred thousand shillings, or to imprisonment for a term not exceeding three years, or to both.”
  • Subject Authority– Chapter 19 Part II (4) (i) concerning micro-finance businesses, the Central Bank has the authority to prohibit any “such other activity as the Central Bank may prescribe.” Chapter 19 Part IV provides for Central Bank’s authority to inspect the records and even to intervene in the management of any micro-finance business.

How to Manage a Side-hustle alongside a Full- time employment(8am-5pm job)

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Being your own boss is a freedom that most employers yearn to have.With the change in trends most entrepreneurs have sort to serve two masters at ago,(that of being employed and that of having a personal business).So how does one balance between the two? So as to avoid putting more pressure on one entity and leaving the out the other.

This article will,offer possible means on how one can perform in both the two entities without leaving out the other,or without feeling strained.

So What is a side hustle?

side hustle is a way to make some extra cash that allows you flexibility to pursue what you’re most interested in. It can also be your true passion – a chance to delve into fashion, travel or whatever it is you care about the most without quitting your day job.

Here are four ways one can use to maintain his or her side hustle alongside full-time employment:

1.Be Free to Learn Something New

Have a side hustle that benefits you both financially,social-wise and knowledge-wise.It is good to be open minded so as to learn something new.This information could be helpful to you the entrepreneur as you can use it , to add to your professionalism during the 8am to 5pm work hours. Above  all have a sacrificing heart,this will make you achieve a lot in both  your work area and your hustle,you can do away with nights outs to expand your business.Or weekend hangouts for full servicing at your hustle.

2.Focus and Prioritize

It is good to set goals for both your hustle and your work. In order for you to perform well at both entities it is good to set goals prior to time.Having set goals will guide you to know when to take action for both your work and the hustle.One will also minimize on procrastination and grape vine .It will help the individual to be more productive

3.Time Discipline

learn how to use limited time to your advantage.In this case, one should familiarize themselves with the Parkinson’s law,this is the idea that work expands to fill the time available for its completion.Entrepreneurs should avoid giving the excuse of limited time,instead  work on the little time you have to achieve what you can,or what is necessary.Time yourself to see how much task you can complete in an hour.Get to account for your time schedule ,be honest with your self ,because the bigger picture is to see both your business and work flourish.

4.Allow Flexibility

Engage your self in a side hustle that is flexible,as much as your availability on it is concerned. For starters do a side-hustle  that will work out at any time you are out from work,maybe early mornings,lunch hour,at night,over the weekend.So that it doesn’t affect your work timetable.The reality being, everyone experiences busy weeks and slow weeks. In case of a slow week, dive into your side hustle. If it’s a busy week, don’t be afraid to take a breather.You could also set aside your leave days for your side hustle.

As a media practitioner I tend to ask questions for clarity.On my few Uber rides ,I  came across an Uber driver who shared to me  his working hours on Uber ,to be early mornings and late evenings,so I asked him why does he not work during the day?With his good customer care services he replied that, during the day he is an accountant at Commercial Bank of Africa  (CBA bank)  from 8am to 5pm. With my curiosity,I then asked how does he balance between the two?his appealing response was, he is on Uber from 5am t0 7am then from 6pm to 9pm on weekdays and over the weekends,he now works during the day from 7am to 6pm. I was thrived by how he handles his side hustle and work,to be productive on both ends, and how he has applied all the above principles to make sure he balances between the two entities and above all giving his best to all.

It is good to find a pocket of time to work on your side hustle,the need is to create extra cash besides employment.A side-hustle will make an individual to grow their own business and build a brand for themselves.Sometimes the skills you do and learn at work will help you to maximize more on your business.

 

 

Saving 101: Tips on how to save money

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The entrepreneurship sphere mostly targets one’s saving ability, one fails to maintain their business due of lack of financial literacy and lasting saving skills they say. If you are thinking of starting a business soon, start saving. Kenya Business Guide spoke to Frank Mwakitakula, founder and CEO of Young Savers Kenya, who shared tips on saving. 

How did Young Savers Kenya start?

Young Savers Kenya is Frank Mwakitakula’s brain child.  I conceived the idea while at Lenana School.  In form three, I had tried all sorts of saving methods to raise some cash from pocket money from my parents and relatives to enable him start a business back at home that would generate income to assist him pay fees but failed. I had conversations with teachers and friends and realized that so many students were facing the same challenge. I also realized that there was a gap in financial literacy and saving habits among fellow students. Some wanted to save but didn’t due to lack of such a platform in school and some saved using traditional methods such as ‘locked tins’. I couldn’t imagine the same happening to millions of students in the country, within East Africa region and the whole of Africa. There was an unmet need, a solution was necessary and could be found; and then the idea came up.  I realized that saving for future investment or any other goal needed a platform, skill, patience and discipline.  The solution would be Young Savers Kenya!

Initially the idea was charity-like, just to enable students save but during the process of developing it, I realized that the idea could actually be commercialized.

What mistakes do entrepreneurs as regards to saving?

Spending first and then saving what remains, instead of the other way round. Money should be considered as part of the expenditure and not some reserve that can be accessed at anytime.  Entrepreneurs must build the discipline required to put a portion of their money aside first before they spend it.

Secondly, poor monitoring of expenses and living outside one’s means. This takes away the money that should have been set aside for the company’s future financial needs.

What are the benefits of financial literacy?

Financial literacy helps a person:

  • Distinguish between personal and business finances.
  • Be a competent buyer of financial services-understanding financial products, their costs and risks, and selecting what is suitable for the business.
  • Anticipate the businesses’ future financial needs under alternative scenarios.
  • Assess the risk to which the business is exposed and prepare appropriate responses.
  • Understand the decision-making process of financial providers and thus appreciate how the business can become credit-worthy or investment ready.
  • Relate the business’ financial needs to the country’s regulatory and fiscal framework – to appreciate the nations regulatory and tax efficiency.
  • Exercise financial management, for instance; to use financial information to analyze business performance and create policies and controls that optimize this.
  • Generate spendable cash and opportunity war chest for the business that would help it take advantage of opportunities.
  • Bring in the dead capital (financially invisible assets like; mental capital, lands without title deeds, undervalued buildings, ideas) within their ventures into the mainstream financial system.
  • Avoid majorities of financially illiterate directors on company boards.

As an entrepreneur, how does one save?

  • Don’t save what remains after spending, spend what remains after saving.
  • Monitor expenses – know what you have spent and how much one has available to spend.
  • Budget – this is the ability to plan one’s spending frequently and accurately as well as to adhere to ones spending plan. This coupled with monitoring expenses will avail more funds to save for future financial needs and prevent the company from running out of cash.

So how does one stay disciplined? 

  • Have objectives and goals – this will enable you have some inside drive to achieve the objective or goal set.  The desire to meet the objective will always keep you on toes to deposit savings so as to achieve it.
  • Reduce unnecessary expenses – some expenses can be foregone and the money instead replaced with savings or rather adds up on savings without struggle.
  • Know how much you have – knowing how much you have or earn will make you plan on the most appropriate amount to allocate for savings without straining or overstretching personal resources.
  • Practice – saving is a skill and can be learnt with proper practice till it becomes a habit.
  • Mindset – It’s all in the mindset.  If you convince your mind that saving is so important and should be part and parcel of your budget, then it will be done with so much ease.

What is the main aim of saving?

  • The main reason for saving is to cater for future financial needs; expansion of ventures, emergency situations, tertiary education, retirements. All this is geared towards achieving financial freedom.
  • Emergency cushion – this could be any number of things; out of pocket expenses or sudden loss of income. You will need money set aside for these emergencies to avoid going into debt to pay for your necessities.
  • Retirement – if you intend to retire someday, you will probably need savings and/or investments to take the place of income you’ll no longer get from your job.
  • Average life expectancy – with more advances in medicine and public health, people are now living longer and needing more money to get by.
  • Volatility and of social security – social security was never intended to be the primary source of income and should be treated as a supplement to income.
  • Education – the costs for private and public education are rising every year and it’s getting tougher to meet these demands. Without money put away in savings and/or investments, you open yourself up to other risks as well.  For example, not having enough money to pay for emergency dental care may force you into taking a loan that your savings might have otherwise covered.

What is the appropriate age for one to start saving?

A newly wedded couple should start saving for their unborn kids. To the kids, the parents should take the responsibility to teach their kids about saving money as soon as they start handling cash such as being sent to shop to purchase something.  This will go a long way with them and will develop that financial discipline as they grow and continue to handle “bigger cash”.  All this will help build an upright well molded child as money as they say is the mother of all social evils.

How to make the best out of a merry-go-round Chama investment group

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  • Chama is a Swahili term that means an investment party or group, that has male and female members.
  • The main objective of a Chama when it initially started was for members to meet, talk, eat and contribute a specific amount of money monthly. Each month a person would receive the money and use it for project or whatever investment they wanted to make. This goes on until all member in the group get money and the process starts all over again.
  • The merry-go-round Chama is not only a good saving vehicle but has now become a good borrowing and investment platform. Members borrow money at a small interest rate and the group also decides to invest in projects as a group. 

Whatever type of Chama you belong to, you should ensure it is worth your time and investment. As an investment group or an individual in an investment groups, here are ways to make it worth your while. One can make extra money from the Chama shares one gets. This will help you achieve financial independence status. So what ways can one have an investment from the chama?

Have a shared goal

As members of an investment group, do you have a shared goal of what you what to achieve? It is in human nature to compare and desire what your neighbour has. But is is only wise to learn from others. Milele Alliance is an investment group that through their shared goals, their investment worth now is at KSh 35 million. They started by purchasing two acres of land in Elementaita and Juja and now the pieces of land are being used for collateral.

Powerful vision

Do not have a vague vision that will end up being buried in a report book where nobody knows what really the vision means, what actions is implied and what they stand for. Having a powerful vision means that the vision should have all the 7Cs. A vision inspires action. A powerful vision pulls in ideas, people and other resources. It creates the energy and will to make change happen. It inspires individuals and organizations to commit, to persist and to give their best.

A vision is a practical guide for creating plans, setting goals and objectives, making decisions, and coordinating and evaluating the work on any project, large or small. A vision helps keep organizations and groups focused and together, especially with complex projects and in stressful times.

The 7 C's of a Powerful Vision

Professionalism

How are the activities in your investment group being handled? What do people say about the group? What is the communication chain of the group? Is the organogram clear, are members performing their designated roles? As much as you may develop friendly relationships from your investment groups, it is very important that activities within the Chama are handle professionally. The organisational structure should be respected and proper flow or chain of communication should be established at all times so as to avoid misinterpreted or misguided  information.

Investment goals

What big thing do you what to achieve? What legacy do you what to build? What will you do that will break records and make your group stand out from the rest of the Chamas? Investments must be chosen with a main goal in mind: safety, income or growth. The first thing you need to decide is which of those three characteristics is most important. Do you need current income, growth so the investments can provide income later, or is safety your top priority.

Investment whether for an individual or a chama is an art. Chamas are an investment. Success depends on the choices you make. Choose wisely and have a legacy for people to promote your business.

Photo by Voices of Africa