At this time, the economy is bad almost for all terrible effects of COVID-19 and the many loans that the country is attending to the prices of most basic products.
All these and other factors have dried Kenya’s pockets that need support to pay school rates, improve hospital companies and invoices are some of the difficult situations that many meet and need some quick money to classify it.
However, banks that are the main reliable lenders have their long processes that one must continue to acquire the money. And what happens if it has a pending loan that may not have been breached and can no longer access credit facilities even to money lenders online?
This is where a private loan partner is useful, since he will be willing to give him money without considering his credit history.
You can then use your items as TV, refrigerator or microwave and anything that has a monetary value so that these loans create a good opportunity for a private combination business that despite their deficiencies, has prospered in Kenya.
Interested in starting this company? This is how to start:
Location
The most pressing financial needs that may require the intervention of private lenders are not back in rural areas but in urban areas. Its private loan business will prosper better in the city or in an urban environment than in rural areas.
Identify the need for private loans
Not only begin to give money to people who could not have needed their speech. This is a business and must first identify an exploitable gap. People will always have financial needs anyway.
Record your business
You must register your micro loan company in the appropriate agency. You must also obtain all necessary licenses and permits. And most importantly, it must comply with the legal obligations that require the government to avoid falling into problems.
Contract forms project
The signed contracts are very recognizable by law. He only needs the person who is lending money to sign a contract form and can sue them in a court of justice in case of anything (which rarely happens if he has a guarantee) and will still be safe, no unless it is discovered that forged a fraud document.
Do not forge signatures: let your clients sign the contract forms themselves. Contract forms are the only thing that makes the agreement between you and the binding and legal borrower.
Determine interest rates and the maximum amount you can provide
You must determine how much you will charge for your money borrowed in terms of what duration. Most people who make private loans offer 10-15% daily loans. Depending on its unique circumstances and market conditions also determine the rate at which it will charge interest. You must also determine how much your limit is, depending on how much you have to offer.
Determine valid collaterals
Any customer who lends money is a possible resident, regardless of how much you trust them. You will need a guarantee when they borrow money, which will retain or sell if they fail to comply, or return to them after they pay the loan and interest.
You must determine what guarantees it will take, which can also be in line with your existing business, such as electronics, if you are running an electronics store. The guarantee you take must have much more value than the amount that the client seeks to borrow, to ensure that it is protected in case they are not breached.
Market your private loan business
He had already identified a market gap and knew that most people would need their private loan services. From mouth to mouth, social medial or any other local medium, send the word that these services are offering. Report potential customers who can go to you when they need the service.
When all this is done, it will need an initial capital that can be something that begins from Sh3,000 to SH0.5m and beyond.
Let’s look at possible returns:
If you provide your SH250,000 to SH500,000, that is, in small quantities for several people for 30 days with a 15% daily interest, then at the end of the month, hope that Sh1,125,000 to SH2,250,000.
Even if it does not lend the total amount, any amount you provide will grow by 450% at the end of the month, but you feel that the interest rate is high, it can reduce it and still earn money.
The risks
Sometimes, as a private lender, you will have to deal with stolen articles and this makes it prone to be sued in case you are trapped. In addition, they can be given defective or obsolete articles and end up losing money since it cannot resell them.
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