During these difficult times, many small businesses that have identified niches in which they can operate and grow profitably will still find it difficult to raise capital for growth and expansion.

The main reason will be that even personal savings are being worn thin by rising living expenses especially in Kenya. The climate of anxiety will also make it difficult for one to raise capital from friends and relatives who are living under the shadow of being laid off or having to do with lower salaries, meaning they will hold on to their savings rather that risk them in uncertain new ventures.

Banks have adopted a more cautionary lending policy meaning that unless one has a long-standing and healthy relationship with a bank, they are going to find their facilities reduced or with additional conditions.

There is, however, some good news for small businesses. Over the last several years several foundations and venture funds with interest in small businesses have set up shop in Kenya.

And loaded with money from high net worth investors and governments, especially European and those laden with petrol dollars from the Middle East, they are showing an appetite to invest in small businesses that have huge room for growth.
Source: http://www.bdafrica.com/