- The empowerment groups were taken through training on wealth creation through investment in business on Friday at the Waterfront Hall in Kizingo.
- The groups were formed under the patronage of EALA MP Hassan Omar, who has been preaching investment to the youth in Mombasa.
Image: JOHN CHESOLI
Nine women, youth and persons with disability empowerment groups in Mombasa have formed about 14 companies, which they say will be up and running by the end of the year.
The groups were taken through training on wealth creation through investment in business on Friday, August 25, at the Waterfront Hall in Kizingo.
“The idea is to ensure the groups stay together and do not squander the money they have been given as seed capital as has happened with many youth groups in Mombasa,” Edward Oduor, a beneficiary, said.
The groups were formed under the patronage of East African Legislative Assembly MP Hassan Omar, who has been preaching investment to the youth in Mombasa.
The nine groups have received more than Sh15 million in seed capital for their companies, fundraised by the UDA vice chairman.
Each of the about 14 companies have a directorship of between 12 and 15 people.
Jason Gathu, a business expert, said most youth and women groups disintegrate once they get some funds because they usually are not trained on how to invest or come up with a business plan.
“We were invited to speak to these groups and give them the basics of forming a company from conception to scaling up so as to ensure that they do not fail and the seed capital given to them does not go to waste,” Gathu told the Star.
Any business or company starts with conception before it goes to incubation, start-up and then scaling up, the groups were told.
“Conception is you want to start a company, what should we do? Incubation is forming it, doing the administrative works, getting CR12 and business plan, and getting the directorship in place. Then a start-up is when you start your business, putting the plan into implementation,” Gathu said.
The company is now legally an entity and once it has found its feet, one can now scale up.
This can be done by getting somebody else to join as a partner, or getting additional funding to start selling larger volumes.
Gathu said the Friday training was at the conceptual level.
“They are transitioning into incubation. The groups have formed their companies, all of which have seed capital and CR12. They are now going into business plan in the incubation stage.”
The groups also got help from lawyer Fatma Barayan, who helped set up the companies, and through the Youth Enterprise Fund and assistance from consultants from Nairobi, the groups will be coming up with elaborate business plans.
The groups, according to Oduor, have decided not to touch the seed capital for thee preparation stages.
“They said they want to keep the seed capital as intact as possible and they will be going into the market in the next two to three weeks. So before the end of the year, a number of those companies should be up and running,” Gathu said.
Omar who attended the training session on Friday, according to sources, narrated how he started one of his companies, borrowing money from one of his political friends.
“He however said we pay back the money in about three years. He insisted to us the importance of paying back any borrowed money so as to enhance a company’s credibility,” a source who attended the training said.
Vincent Obuya, one of Brotherhood Group members, said they formed the Brotherhood Company, which has 15 directors.
“We have been taken through the investment portfolio. They also gave us different business models and ideas, which we can pursue,” Obuya said.
The company was given a seed capital of Sh1.1 million by Omar.
“There will be a follow up training later. We will also be connected with the financial institutions and agencies so that should any need arise, we can easily get loans,” Obuya said, adding that financing is the biggest challenge small start-ups get.
“We have seen companies formed by youth get tenders but then the tenders are taken away from them because they fail to raise capital to do what they tendered for.”
He said this is what they hope to avoid.
Oduor, one of the directors at Solitaire Unity Ltd, formed by one of the groups, said they have been empowered both financially and in ideas.
The company, which has 12 directors, was given a seed capital of Sh2.5 million.
“Officers from the Youth Fund have taken us through how we can come up with business plans, how we can manage our business sustainably and how we can access financing from different financial institutions,” he said, adding that he has been in other youth groups who formed companies which later failed and disintegrated because of lack of seed capital.
“Right now, if we go to a bank or any other entity and they ask us how much we got in our account, they will be able to give us the loan because we have something significant in the account. That gives us an advantage.”