Sourcing of Funds... Continued (15 Minutes)

One morning the credit officer came to see Hosea’s business and was shocked to see the low stock. He therefore gave Hosea two months to improve on the loan repayment otherwise the bank would sell his father’s land to recover the money. At the end of the two months the loan repayment was even worse, and the bank had no option other than to sell the family land.

Today Hosea’s family has no land and they are squatters.

Discussion Questions

• How did Hosea get the capital to start the business?
• Do you think Hosea needed extra funds to expand the business or should he have continued with the small business?
• Should Hosea’s father have refused to give the title to the family land to secure the loan?
• What do you think went wrong in Hosea’s plan?
• Was it wrong for Hosea to get married?
• Was the bank wrong to sell the land?
• If you were Hosea, what would you have done?

Funds Application Process
The process of application depends on the source of funds. The banks have the most complex process. This entails completion of application forms and submission of all the documents required by the bank. The SACCOS and micro finance institutions have a simpler process although applicants have to complete forms and provide any other information required. The other sources are informal and hence do not have too many complications.