South African Firm BPI Keen On Financing Kenyan Lifestyle Businesses

How To Scale Your Registered Lifestyle Business SME #womeninbusiness #womenintech #BPI

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Creating Worlds 

Are you looking for a way to fund your lifestyle business? Then you need a good dose of Business Partners International. The South African company specialist risk finance company, BPI has made investments worth $42 million in Africa. Speaking at an intimate media breakfast, Country Manager Sally Gitonga, who has been with BPI since their Kenyan inception, has brought Kenyan SMEs to the fold. “We have invested $7 million in Kenya. Along with that, we have over the years created over 1800 new jobs, maintained 7,000 active jobs and closed 185 deals since BPI launched in 1981 in South Africa.”

Opened in 2006, the Kenyan branch is a fully realised office based on the 9th floor of Lenana Towers. Referring to their clients as the missing middle, BPI offer access to finance, access to support services and their unique selling point, technical assistance. Their loans go towards entrepreneurs who have shown an expertise in their area, or who have been in business for a recognisable amount of time and wish to expand. lifestyle businesses tend to be brands that are built by a husband and wife team, family and friends to support their lifestyles. They are not as sophisticated or as attractive to banks, and their founders launched them with the belief that they are not meant to be scalable.

More Than Dollars In The Economy 

It is their technical assistance, however, that gives them an edge over other financial lenders. Up to 30% of any loan taken is interest free if used specifically for technical assistance. This includes, but is not limited to, business strategy and monitoring, accreditation if needed, marketing, software and fire safety audits. So far, that amount has added up to $1 million. “Sometimes once a client gets a loan and our team moves in to work with them, they realise they do not really need a loan for technical assistance. They find that their problems are getting resolved just by participating in their business differently. We have to do a lot of hand holding with our clients and walk them through the process step by step.” Part of that walk includes spending the 30% on the onboarding of mentors to help grow a business especially where entrepreneurs need to scale.

Women Are Welcome Here 

While you might think their motives are altruistic, Sally says, “We take a big risk funding businesses in this gap so we have to do our due diligence. We have to make sure the business we are supporting can make money.” Some of the challenges they struggle with has been the high cost of appraisal to vet prospective clients, the absence of collateral, a limited upside to scalability and the intense degree of due diligence. The process before taking up a lifestyle business as a client is quite thorough. This is understandable as the minimum investment is $50,000, all the way to a maximum of $1 million.

Concerned about female entrepreneurs? Do not be. 25% of the fund has been dedicated to them. Research has proven, and Sally reiterates that “women are statistically proven to be more likely to pay off their loans more than men. Women will rarely default on their loans. They are also more structured when it comes to running their business.”

BPI have firm roots in Malawi, Namibia, Rwanda, Uganda and Zambia.

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