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This article is part of Mkono's new Mawazo thought leadership series. At Mkono, we want to continually share insights on the ever-changing landscape of microfinance, SME growth, economic development and more.
Microcredit Organizations and Microfinance Institutions (MFIs) have existed in Kenya since the 1990s as a means to provide financial support to Small and Medium Enterprises (SMEs). SMEs face several challenges in accessing loans from banks and other traditional financial institutions, often influencing their decision to work with MFIs instead. Entrepreneurs working with Mkono have listed a few of these challenges which have included the size and type of their enterprise, high interest rates charged by formal banks, greater risk associated with formal bank loans as well as the bureaucracy that exists in formal institutions, which leads to lengthy and tedious loan processes.