Financial sector development plays a huge role in economic development. It promotes economic growth through capital accumulation and technological progress by increasing the savings rate, producing information about investment, facilitating and encouraging foreign capital inflows, as well as optimising the allocation of capital.
This was part of the message by Bank of Kigali as it launched a financial literacy clinic-a business oriented entertainment programme targeting the youth.
To reach out to the young entrepreneurs, the bank has for the past two weeks broadcasted a show on Bank of Kigali YouTube Channel and Isibo TV every Sunday at 9pm.
During this week's series, however, Thierry Nshuti, the Head of Marketing at Bank of Kigali said that in order to pursue business as a carrier, there is a need to understand the basics of financial development.
Nshuti, therefore highlighted the five basics that young entrepreneurs are supposed to grasp in order to grow financially, thus contributing to the country.
"All successful entrepreneurs start their journey with a clear business idea", Nshuti said.
Besides, he adds, "Having an idea allows you to determine the answer to some of the most critical business decisions ahead of time. It also helps to answer many tough questions before they arise. And thinking deeply about your core strategies can also help you understand how those decisions will impact your broader business model"
This, according to Joel Murenzi, the Acting Coordinator of Youth Empowerment Unit in Imbuto Foundation, is in line with Art Rwanda Ubuhanzi.
The latter is a nationwide talent search project implemented by Imbuto Foundation in collaboration with the Ministry of Youth and Culture and the Rwanda Academy of Language and Culture.
"We normally encourage young artistes to have a clear business idea in order to excel in the program" he said.
2. The motivation
According to Nshuti, it is important that young entrepreneurs understand the motive behind their ideas.
"There are many reasons people give for wanting to start their own business." However, he adds, "Not all of them are good reasons. An entrepreneur's motivation for starting a business plays an important role in the ability to succeed."
For instance, he pointed out that, if the motivation is a result of a certain talent, then there is a need to look out for a unique angle in which it can look different from the rest.
3. Enough information
Entrepreneurs need to master enough information concerning their business plan, this will enable them to be accountable and responsible for all the little details in their business, Nshuti noted.
Additionally, "There are several common and dangerous mistakes many young entrepreneurs make that can negatively impact their businesses. One of them is lacking enough information on the matter"
As an example, Nshuti said that, "A young man approached me and told me that he wanted a loan from the bank. Deep into our conversation, I noticed that he didn't have enough information about what he wanted to do, and therefore could not help him. But rather asked him to have a deeper concept on his business"
Murenzi emphasized that most young people are thrilled to learn that they have great ideas or even talents and they end up forgetting to dig into the matter more.
"We have seen a number of artists who come to our program, (Art Rwanda Ubuhanzi), with great talent but end up failing due to the lack of enough knowledge concerning the matter" Murenzi asserted.
4. Knowing the minimum capital required
As opposed to big business owners, Nshuti told the young entrepreneurs that the fourth step is knowing the least capital required to start a business.
He, however, underplayed the idea of looking for millions of capital at the start whereas the business could start with just little money.
"Young people have a mentality that before starting a business, a lot of money is required. With this idea in mind, most of them end up losing interest in starting the business because they can't get the capital".
Starting a business with very little capital is very challenging he says, however, different testimonies show that it can be done.
Besides, "If you are going to start with very little capital, you need to plan carefully. This starts with your business model. Ideally, you are starting a business with very little, in most cases, with you as the primary source of labour. It is important to keep in mind that this model is going to have lots of competitors, so you'll need to compete fiercely for customers." Nshuti adds.
5. How to secure capital
According to Nshuti, the most challenging step for entrepreneurs is how to secure capital.
However, he suggests that entrepreneurs should not be scared of this step because there are various alternatives to help them.
"To the youth and all other entrepreneurs, at times you find that your first option is not a loan from the bank, but rather finding a person with whom you share the same interest."
Alternatively, "You might have a business idea today but you choose to save before starting operations. This would also help in terms of having a capital" Nshuti said.