The Unreasonable East Africa incubator has launched its Revolving Loan Fund, aimed at filling the gap in credit availability for its entrepreneurs by providing them with loans of between US$5,000 and US$50,000.
Disrupt Africa reported last week Unreasonable East Africa picked 12 early-stage startups from Uganda, Kenya, Tanzania and South Sudan to take part in its programme, with the ventures building solutions to the region’s biggest social and environmental problems.
The incubator has now followed that up by launching its Revolving Loan Fund to fill the funding gap for startups in the region.
“We have learned that for our ventures, the challenge of finding appropriate financing is a massive burden and needs new models of financing to fix. Most of them get stuck in what we call the “valley of death” with angel financing on one side and Series A financing on the other,” Joachim Ewechu, co-founder and chief executive officer (CEO) of Unreasonable East Africa, told Disrupt Africa.
Ewechu also said the company was experimenting with a potential business model, charging its entrepreneurs an upfront fee of US$3,000 to attend the programme while also signing revenue share agreements with them.
He said when selected startups, Unreasonable East Africa looked for impact, strong teams and scalable ideas, with the entrepreneurs set to gain the ability to make business decisions with confidence and clarity.
“They will have a chance to take a step back from their crazy day-to-day to re-evaluate their vision, refine their strategic plan and learn tested decision making frameworks. They will build off the feedback and encouragement from mentors, investors and fellow entrepreneurs,” he said.
“They will utilise the knowledge gained through our workshops, such as a better understanding of their market and insights on how to build and manage their teams, to strengthening and streamlining their business models.”
Ewechu said the startups would be able to show potential funders they are ready for investment.
“They will be able to confidently build strong investor relationships through superior preparation and compelling documents,” he said.
