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Esther Muchemi, the dynamic Founder and CEO of the Samchi Group, recently shared her thoughts on the challenges posed by the rising loan interest rates that have taken a toll on businesses. Drawing from her own experience, Muchemi highlighted the significant impact of these increased rates, which she believes are reminiscent of those last seen in the 1980s.
She pointed out that many businesses that borrowed funds two years ago are now facing repayments that are 30% higher simply because of the changes in interest rates. This shift, she noted, has introduced new risks for both personal and business finances, urging entrepreneurs to take proactive steps to mitigate these challenges.
Muchemi offered several solutions to navigate this difficult financial landscape:
- Review Business Finances:
- Assess whether your business can still afford the loan repayments through increased revenue or cost reductions.
- Engage with Your Bank:
- Discuss with your bank if you’re facing issues with repayments to explore possible solutions, such as:
- Reducing the interest rate.
- Offering a moratorium.
- Rescheduling to a longer repayment period.
- Combining all these options.
- Discuss with your bank if you’re facing issues with repayments to explore possible solutions, such as:
Muchemi emphasized the importance of open communication with banks, advising business owners not to ignore the problem but to take action. She also noted that some people are choosing to sell property, liquidate fixed deposits, or use other assets to clear loans and relieve financial pressure.
Recognizing the current environment as a particularly difficult season for bank loan interest rates, Muchemi encouraged business owners to rethink their strategies. She stressed the importance
