23 January 2013

Zambia: 'Invest Personal Loans in Business'


BEFORE I proceed with this week's discussion which is on business financing, I would like to first acknowledge the flowing amount of feedback being received on this column.

The SMEs Corner has gained popularity not only beyond Zambian borders but also across the oceans, with the latest feedback coming from a keen follower from the state of Texas in the United States of America.

Nathan Nkhama is eager to contribute to the column in his own way.

As we look at business financing, I must state here that this is one of the challenges mostly faced by prospective entrepreneurs in Zambia.

No matter how brilliant a business plan might be, no matter how it may attract workable ideas on the ground and give appetite to the admirers, as long as it is not funded, it remains a pipedream for years to come.

Otherwise it may end up in a trash basket and sometimes the brains behind such brilliant ideas may end up dying without implementing such brilliant ideas.

However, financing a business generally can be looked at from different angles.

Some business entrepreneurs may fund their projects from long savings, others may borrow money from their wealth relatives and while others may stake up their collateral to borrow money from lending institutions such as banks to start up their businesses.

But today in my discussion I want to discuss an avenue which I have discovered concerning raising business finance more especially for prospective entrepreneurs.

Personal loans in this country have been on the rise and banks have taken the upper hand in providing the same mostly to workers.

This trend of acquiring personal loans by workers has at least given a picture of wealth to them. Personal vehicles and building of houses has been the order of the day for workers.

One day I went to a bank for my personal business, and I found a group of people seated waiting to be attended to. My heart jumped thinking that may be something in the negative could have happened.

I was shocked when I learnt that they were waiting for their personal loans.

This is the extent to which workers have gone in accessing money to enable them increase their personal wealth.

The banks today have gone on rampage to sign memoranda of understanding (MoU) with employers such as the government individual ministries, quasi government institutions such as Zesco, Zambia State Insurance Corporations, National pension Scheme Authority and public and private companies, the list is endless.

The banks find it easy to lend to workers coming from the reputable companies simply because of the signed MoUs which among other things compel the employer to cut a cheque on monthly basis for the

deductions of the employees who obtained loans from the lending institutions.

I should mention here that the lending institutions have come to the rescue of these employers. Instead of using their own resources in giving out loans they have shifted this burden to the lending

institutions who have broadened their business base of making profits giving out loans to workers.

Let me not digress from my usual talk on entrepreneurship.

My main aim of touching on this topic about personal loans is to encourage workers especially those who can access personal loans to start businesses.

I want to challenge the workers to embark on business plans and obtain personal business loans and invest them.

Two doctors who are about to retire can go into private partnership and combine their skills and money in the area where they can give such services.

This is a typical example.

However, a business plan needs to be brainstormed and qualified as something that can work before funds can be committed to it.

It is important to mention here that a business is a risk and a well calculated risk can pay dividends.

A researched and well calculated business can help create wealth for entrepreneurs and help to improve the wellbeing of the economy in the country.

The workers, therefore, should take advantage of the loans being offered by the commercial banks and utilise them by investing them into properly researched businesses.

For any comment contact cell 0979212235 or email: wklpublications699@gmail.com.

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