GroFin is the latest multi-national financing institution that is set to attract SMEs. EDDIE MUKAAYA caught up with the company’s General Manager,Eric Rwigamba Below are the excerpts.

Why SMEs?
Every successful business starts with an entrepreneur’s dream. For the vision to become a reality, the business needs much more than finance to become.

Businesses in the early stages don’t have the necessary track record or collateral to access finance from banks and their finance requirements are out of the range of microfinance institutions.

Any specific areas of investments?
We consider SMEs whose financial needs are start-up capital, expansions, outright purchases, management buy-outs, management buy-ins and franchises. We do not consider seed capital or short-term bridging finance.

How does an entrepreneur qualify for your finances, how long does it take?
A seemingly viable business plan aimed at establishing a formal SME will be considered for initial assistance, provided that one falls within the finance guidelines.

Entrepreneurs who submit a proposal are advised within days whether their application for finance meets the broad finance criteria.

And other deserving applications will also receive detailed business development assistance until the application is approved or rejected. 

Once the business plan is finalised, a due diligence investigation is undertaken before the transaction is submitted to an independent finance committee for consideration. 

Approval by GroFin’s Board triggers the legal implementation of the transaction.  The time from completion of the final business plan to approval is generally one month.

How do you determine a viable business plan?
Each application is considered on its merits, mainly the skills, experience and industry knowledge of the entrepreneur, as well as the potential profitability and sustainability of the business.

Writing a business plan is a challenge for some SMEs, do you offer that service as well?
We firmly believe that the finalisation of an investment quality business plan should be driven by the entrepreneur.

However, our business development assistance is focused on assisting and guiding the entrepreneur to achieve exactly that result.

Would you finance SME’s plans for expansion?
No! There is a fixed range of funding. We invest up to $ 1 million to viable SMEs. However, those in need of funding below $50,000 are not usually considered.

What is the criterion for funding?
GroFin looks for an entrepreneur with commitment, integrity, drive, vision, appropriate experience and sufficient skills.

Thereafter we would consider a viable business plan including good marketable product or service and a sound operations plan.

Potential transactions are also assessed on the level of contribution that the entrepreneur maybe able to offer. Although the lack of collateral is not a disqualifying criterion, the availability of collateral is considered.

How flexible is yours repayment period?
We discuss with the client a suitable repayment period during the business development process basing on the due diligence investigation and final structure negotiations.

However on average, the repayment period is 4 years and is never longer than 6 years.

Do you any specific condition?
As each business transaction is individually structured, terms and conditions of finance vary.

Do you by any chance provide grants or soft loans?
GroFin has a commercial approach and only supports commercially viable businesses. We do not offer or facilitate grants or soft loans.

Ends