Business support for Kenyan horticultural SMEs

06/01/2021
Posted by: Sandra Borma
Category: Kenya, News

Reviewing the business plan

During the second half of 2020, COLEACP’s Fit For Market and NExT Kenya programmes supported five Kenyan SMEs to update their business plan via an in-depth review or coaching. The companies particularly appreciated the detailed support from experts in the horticultural sector. An external view to critically assess the company’s operations and underlying assumptions has been an eye-opener for many SMEs. Joint construction of the business plan and priorities ensures ownership and provides companies with clarity on their unique position, facilitating discussions with prospective financial partners.

A business plan is first and foremost a tool for presenting the company’s strategy, demonstrating the quality and potential of identified opportunities; defining priorities by setting both operational and financial objectives; and identifying the main risks by providing alternative scenarios (particularly in terms of the assumptions underlying financial projections). It is a tool to help manage the company and ensure its projects are coherent and feasible.

SMEs requested this COLEACP programme support in order to:

validate assumptions on a new business venture (a new product line, change in the business model, investments in the company)

access external finance (banks, international financial institutions)

optimise business management practices and gain better understanding of the company’s strategic positioning, risk exposure, cost structure, cashflow, etc.

Links to financial institutions and complementary support programmes

COLEACP is actively developing relationships with international financial institutions and other donor programmes that provide support to the Kenyan horticultural sector, and sharing information on calls for application, including the following:

EU-funded AgriFI Challenge Fund in Kenya: more than 200 companies applied for funding in the most recent call (August 2020), which will be followed by a third and final award of financial support in early 2021

KIEP 250+ (Kenya Industry and Entrepreneurship Project) implemented by the Ministry of Industrialization, Trade and Enterprise Development (MoITED) with support from the World Bank: the first call for applications closed in December 2020; new calls will be organised in the coming months

Common Fund for Commodities: this United Nations fund organises a yearly call for applications; the next one is due before 15 April 2021.

Earlier in 2020, COLEACP signed a Memorandum of Understanding with the ABC (Agri-Business Capital) Fund, which provides loans and equity investments adapted to the needs of rural SMEs, farmers’ organisations, agripreneurs and rural financial institutions. It particularly targets commercially viable ventures that can help create employment and improve rural livelihoods, especially for youth and women. The fund also prioritises climate-smart projects that promote sustainable production. Read more about COLEACP’s partnership with the ABC Fund here.

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