allAfrica.com: Kenya: Sister Partners Find Props in Youth Fund (Page 1 of 2)

March Gaotisia and Fridah Onsongo are twin sisters. They are also business partners at Sky West Production, a media company that benefited from a Sh500,000 loan from the Government-run Youth Enterprise Fund. To them, this kitty was a noble idea whose time had come and they hope to build a business empire from it.

Theirs was a case of personal sacrifice. When the fund came in 2006, they had carved a niche in a competitive TV and radio production business. In a case of striking the iron when still hot, the two sisters started the company four years ago just after completing training in media production at a Nairobi college. They set up the business at home armed only with basic equipment.

Boasting prowess in marketing and production skills, they set off looking for clients, a task they say they went through with considerable ease. Once off the starting blocks, the duo set focus on product quality, a marketing strength that earned them a reputable client base that has made them attractive to lenders.

They shifted the business to a three-roomed office in 2005 in the upmarket Westlands area in Nairobi.

Then came the tragedy that would make them sharper. Their father, the only bread winner in the family, died and the burden of supporting the family of six shifted immediately to their shoulders. Result? They became more aggressive in running the start-up. When the Government created the kitty for the youth, the keen sisters had for long toyed with the idea of expanding their business through a loan.

They had maintained an impressive cash flow in their bank account, which could easily convince any financial lender. Therefore, when the idea of the fund was mooted, they diverted attention to the progress in which it was making.

"The loan charges an interest rate of eight per cent which is quite impressive for a small business like ours," said Fridah.

"In fact, we have a very understanding financial partner," her sister says of the Kenya Industrial Estates (KIE), which gave them the loan.

They used the loan to purchase a modern video camera, a tool that hitherto could only be hired at between Sh5,000 and Sh10,000 a day if they had an assignment.

The item cost them Sh480,000. They got smart and used the rest of the cash on insuring the machine against damage or loss. 'The bank didn't give us this money. They instead wrote a cheque to the company that supplied us with the camera," Fridah said.

With the cost of hiring a camera now out of the way, the two sisters were able to concentrate on the other areas such as marketing, which has seen their business grow by over 90 per cent.

'We first identify a company's need," says Fridah, "then we do a proposal of how we can fill in the gap and discuss this with CEOs."

They use a marketing strategy they consider unique. "Rather than relying on the marketing departments to get an entry point to the company's top level managers, we go it the other way round," March said. "First go to the CEO who will help you identify the people you will work with," she added.

"In certain cases, unscrupulous staff may sell the idea presented as their own and once it is approved, they get somebody to do the job at the expense of the person who conceived the idea," Fridah observed.

This is the strategy that has worked magic for the two sisters and made them acquire a good profile due to the reputable client base. "We did a documentary that was aired in all local television stations and boosted our presence in the market," Fridah said.

According to them, a good client base was a strong persuasion that convinced the KIE to give them a loan. Just before the last elections, they increased their staff by three, and Fridah says: "The business can now feed three other households."

But the two sisters admit that getting the loan was not easy, considering that they were starting from the scratch. "It was not like any other ordinary application we do to the bank as it required business knowledge and understanding," said Fridah.

The two did not have a lot of problems in convincing the financial intermediary into buying their business idea. Their cash-flow indicated good signs of growth in the business.

Radiating with youthful energy, they persistently followed up their loan application "almost daily and when the Fund became available, we were among the first groups to benefit," Fridah observed.

The company is repaying the loan at a monthly rate of Sh22,000. However, due to the post-election violence, the business has gone down and they have not managed to pay any money this year.

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