AGPO Final

AGPO v.1

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AGPO v.1

TABLE OF CONTENTS

PURPOSE OF THE PROGRAM.................................................................................................................4

OBJECTIVES............................................................................................................................................4

TARGET AUDIENCE................................................................................................................................4

Course DESCRIPTION.............................................................................................................................4

MATERIALS............................................................................................................................................5

Lesson 1 – INTRODUCTION....................................................................................................................7

Participants Brief Self Introduction – 10 minutes..............................................................................7

Ground rules......................................................................................................................................7

Course description.............................................................................................................................7

Guess the Person Icebreaker.............................................................................................................8

Lesson 2 – DOING BUSSINESS WITH THE GOVERNMENT......................................................................9

Lesson 3 – SECTOR WHERE AGPO APPLIES............................................................................................9

Lesson 4 – REQUIREMENTS TO ACCESS GOVERNMENT PROCUREMENT OPPORTUNITIES..................10

Module debrief....................................................................................................................................11

Module introduction – 5 mins.............................................................................................................13

Lesson 1: FORMS OF LEGAL BUSINESSES IN KENYA – 25 MINS............................................................13

Ndekezi and friends story................................................................................................................13

Lesson 2: BUSINESS REGISTRATION – 80 MINS....................................................................................14

Partnership/Sole Proprietorship/ Limited Company Registration Process in Kenya........................15

Lesson 3: OTHER LEGAL BUSINESS DOCCUMENTS..............................................................................15

Module debrief....................................................................................................................................15

Introduction – 15 mins........................................................................................................................17

Lesson 1: BUSINESS FINANCING OPTIONS – 75 MINS..........................................................................17

Youth Enterprise Development Fund..............................................................................................17

Women Enterprise Funds................................................................................................................18

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UWEZO Fund...................................................................................................................................18

Eligibility Criteria for Applicants.......................................................................................................19

LPO Financing..................................................................................................................................20

Module debrief....................................................................................................................................20

Welcome...............................................................................................................................................0

Lesson 1 – lpo FINANCING.....................................................................................................................0

Lesson 2 – LPO services offering institution...........................................................................................1

Module debrief......................................................................................................................................1

Individual work......................................................................................................................................1

APPENDICES...........................................................................................................................................2

Appendix 1: Specific requirements for operating business in Kenya.................................................2

Appendix 2: Additional requirements for operating specific businesses in Kenya.............................2

Appendix 3: Regulatory requirements for MSEs................................................................................4

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PURPOSE OF THE PROGRAM

The DOT’s AGPO program provides ReachUp! and StartUp! successful participants with information about public procurement opportunities, the requirements needed to benefit from the same, and the various financing options availed by the government.

OBJECTIVES

DOT’s AGPO program prepares participants to have confidence in doing business with the Kenyan Government, especially in procurement opportunities. The main outcome of DOT’s AGPO program is to empower the youths and women to take advantage of the public procurement opportunities reserved for the special cases, thereby increasing the uptake. The participants will also be able to increase their uptake for financing opportunities availed by the government.By the end of DOT’s AGPO program, participants will be able to:

Identify areas where government/public procurement opportunities exists, learn about the requirements that are needed in order to access government

procurement opportunities, Learn about business registration process in Kenya, Identify government agencies and department that their business need to comply

with, Identifying various options available for financing startup businesses or ongoing

businesses, and Establish their short- and- medium term actions.

TARGET AUDIENCE

DOT’s AGPO program targets the participants who: Have gone through ReachUp! and intends to start businesses, Have completed StartUp! program and have an interest in starting a business. Are currently running a business.

COURSE DESCRIPTION

DOT’s AGPO program is a “final-business” course that can be taken to prepare people from the ReachUp! and StartUp! course to identify and position themselves to the government procurement opportunities that are reserved for women, youths and people living with disabilities. AGPO addresses issues that women entrepreneurs, youth entrepreneurs, and people living with disabilities, running micro businesses face with regard to doing business with the government. Doing business with the government in Kenya is very lucrative and enable new business to stabilize very fast. DOT’s AGPO program addresses these issues through helping participants to do the following:

Understand and identify areas where government procurement opportunities are available. Participants identifies the various state corporations and government

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departments offering opportunities that are in line with the participants areas of interests.

Learn about the requirements that are needed for the Access to Government Procurement Opportunities (AGPO) and how well they can do the necessary arrangements to be well equipped with such requirements.

Learn about the business registration process. That is how they can make their proposed businesses or new business to be legally registered, by the government. Categories of registration and the benefits of each type of registration.

Participate in the identification of departments and offices that they need to legally comply, so as to enable them eliminate inconveniences and embarrassment once their business are up and running.

Participants to develop a complete, SMART Action Plan that will help participants register their business or business ideas. The purpose of this is to come up with a clear road map that will see them through the registration of their business.

Make participants be aware of what short- and medium-term action steps look like.

DOT’s AGPO program involves formal classroom learning facilitated by Interns. The in-class experience is then followed by a deeper application of the concepts learnt through their homework and group work.

MATERIALS

Participants will use a blank notebook to record notes and other details and should bring the notebook to every session. Participants can later refer to their notebook to rethink

MODULE 1, GOVERNMENT PROCUREMENT OPPORTUNITIES

Timing Minutes

Preparation Read through the module to get a sense of the flow and to gain an understanding of what happens

Work through the exercises as if you are a Participant to develop examples or samples for explanations

Read through the module and add notes and your own phrasing and explanations to any complex concepts

Outcomes In this session, Participants will be able to: Take steps to create a positive learning atmosphere Identify the reasons why youths and women should consider doing

business with the government Identify departments and offices where Government Procurement

Opportunities are available.

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Eligibility criteria to accessing Government Procurement Opportunities.

Methods The methods to be used in delivering this module includes: Facilitation Group discussions Assigned tasks.

Purpose This module introduces Participants to the Kenyan AGPO program, and requirements for access.

Materials Notebook Flip chart Sticky notes Markers

Module sections

Welcome, Introduction and ground rules 30 minsIcebreaker 15 minsDoing business with the government 10 minsIdentify government agencies and departments offering business opportunities to women, youths and people living with disabilities.

30 mins

Requirements to access AGPO 40 minsDebrief 15 mins

Notes:

LESSON 1 – INTRODUCTION

Participants Brief Self Introduction – 10 minutes

Now that we had met in the previous curriculum, will quickly do a self-introduction so that we could know each other better. This will be important to us as we will be spending a few more day going through this curriculum.

Ground rules

Set ground rules – 20 minutes

Now that we know each other a bit better, I will walk you through the agenda.

We are going to be spending a lot of time together. You will be very busy, you will be challenged and you will have a lot of fun.

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What are some of the ground rules that we might want to set to ensure that we are working well together?

Share your ideas and answer questions Listen to others Stay open to new ideas Take risks Ask for help Ask questions Help each other Reflect Have fun Participate Respect others by listening and not

interrupting One conversation at a time No cell phones, iPods, etc. Start on time Return from breaks on time Be kind to each other Give this your BEST!

Course description

In this module, participants are going to learn more about the benefits of doing business with the government through procurement process, and further identify government departments where procurement opportunities axis. They will also identify the requirements necessary to enable an individual participate in a government’s procurement process.

To enrich this exercise, as a facilitator, allow the participants to give their expectation for the module. Have everyone involved by encouraging each person to give at least on expectation.

Guess the Person Icebreaker

[Consider spending at least 15 minutes or longer on a Guess the person icebreaker, where Participants will get to guess the name of a person upon the descriptions given.]

Guess the person

Also known as the Name Game or FishbowlThis game works best with smaller groups - around 8-12 people, so if you have a big group, it's best to split up and play multiple games.

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(Facilitator notes)In this game, participants should, where possible raise the names of successful entrepreneurs within their communities, regional levels and even at the national level.

Where possible those doing supplies, construction are key to this module as their roles takes center stage in procurement process.

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Each person should write down the names of 10 people - either famous people or people everyone in the group knows. Get people to cut their pieces of paper up so there's one name per piece of paper. Go around and collect them in a basket or hat. You should have quite a few names in the basket.

Split into 2 or 3 teams (each team having around three or four members).

Round One. Pick a team to start - one member of that team gets the basket of names, picks out a name, and has to try and describe that person to the other members of his team. Once they guess correctly, pull out another name from the hat and so on. The team has one minute to go through as many names as they can. If they get stuck on a name, they can pass and move onto the next name. Names that are guessed successfully, put in a separate pile, those that are 'passed' put back in the basket. When the minute is up, add up the total number of names guessed, and add that to the team's score. Move onto the next team who do the same as above. This continues until all the names have been used up or 'guessed'. Round Two. Similar to Round 1 but you can only use one word to describe the person to your group. The group will be aware of all the names in the basket (from round 1) so it is easier than it sounds. Score a point per name guessed as above.Round Three Same as previous rounds but this time, you have to 'act' out the person without speaking. Add up the scores at the end to see who wins!

LESSON 2 – DOING BUSSINESS WITH THE GOVERNMENT

Understanding what procurement is, will go a long way in motivating the participants to take part. Discussion about what procurement is and what it is not should be made as interesting as possible. The discussion should take 7 – 10 minutes to conclude. Facilitator should ask participants questions such as;

What is procurement?

Which kind of activities takes place in a procurement process?

Who are the key players in a procurement process?

Government tender

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[Facilitator Tips

ProcurementProcurement refers to the various processes or procedures that are utilized in the acquisition of goods, services and works.

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From our previous icebreaker (Guess the person), were there those who provide the government with supplies such as stationaries, construction materials, consultancy services, transport services etc.? How many from the list of entrepreneurs named during the ice breaker were women, people living with disabilities, and youths? What can you learn from the icebreakers?

From this discussion, what is a government tender?

LESSON 3 – SECTOR WHERE AGPO APPLIES

Group participants in groups of 3 in each group. Give out a task of identifying the institution under county government and national offering AGPO. This task should take a maximum of 20 minutes. Call the participants after the elapse of the period and ask a few participants from different groups to share some of the institutions that they generated in their group discussion.

This session may be guide by questions like;

How many organization/institutions abide by Access to Government Procurement Opportunities?

Are they Government institutions or Non-governmental institutions or both?

Note: Access to government procurement opportunities is applicable to all government institutions nationally. The use of local examples of institutions in the area where participants come from, gives them a better understanding of the concept. This would therefore encourage application of the concepts to own business.

LESSON 4 – REQUIREMENTS TO ACCESS GOVERNMENT PROCUREMENT OPPORTUNITIES

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[Facilitator Tips]

A government tender is a formal invitation by the government to suppliers and/ or contractors for the supply of goods, services and works.

[Facilitator Tips]

In groups of 3 participants per group, let them identify organizations/institutions in their area where “Access to Government Procurement opportunities” applies.

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Can a youth group or women group apply for Government’s tender?

Participants needs to have a clear picture of the nature/form of legal organizations and groups that can participate in government tendering process

Most of the Kenyan Youths are in registered youth groups, while most women are in registered women groups. It will therefore be of great significance to have participants learn on women groups and youth groups alongside other legal organizations/groups, identify those that are eligible government tendering process, and can participate in Access to Government Procurement Opportunities (AGPO).

What type of entity do I need in order to apply for Government’s tender?

In order to apply for the government tenders, you need registered entities such as;

Registered sole proprietorship, Registered partnership business, Limited Liability Company.

These entities must therefore have the following; Copy of registration certificate PIN/VAT certificate Tax compliance certificate

And when interested to be considered for Access to Government Procurement Opportunities, you will be needed with AGPO certificate in addition.

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[Facilitator Notes]

The answer is NO.

Youth groups, community based organizations (CBO) women groups etc., are not eligible for government’s tender.They are not eligible for government tender because they are only registered by the social services department, yet to do business with the government, you need to have been registered by the office of the registrar of companies as a business or limited company.Besides they are not registered by the Kenya Revenue Authority (KRA) for tax remittance.

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What do I need to qualify for AGPO Certificate?

For the purpose of benefiting from the preference and reservations schemes (AGPO), an enterprise owned by youth, women or persons with disabilities shall be a legal entity. Thereafter apply for AGPO certificate.

What are the requirements you need in order to qualify for an AGPO certificate?

NB: For online application of AGPO certificate, the required documents must be uploaded via www.agpo.co.ke:

MODULE DEBRIEF

From our session today, can a church youth group do business with the government? What makes them and what does not make them be better placed to do business with the government?

From this community, what some of the organizations and institutions that offer access to government procurement opportunities?

What do you require in order to access government procurement opportunities?

MODULE 2, BUSINESS REGISTRATION

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[Facilitator Tips]

Requirements for AGPO Certificate

Registration certificate/Certificate of incorporation/partnership deed.

Valid Tax Compliance Certificate. Valid PIN/VAT certificate. Bank account details Identification Cards (ID Cards) as

proof of being a youth (aged between 18-35 years), women or PWD as may be applicable.

Business /company profile Exemption certificate (e.g. for

PWDs)

http://www.agpo.co.ke/

AGPO v.1

Timing minutes




Look for relevant examples of legal procedures within the county of operation.

Outcomes In this session, Participants will be able to: Classify various businesses in terms of legal forms, Register new business, State other legal business requirements/documents


Purpose This module enables Participants to have understandings on the various forms legal businesses in Kenyan, understand business registration process, identify all the legal documentations and registrations necessary to operate a business within the operating county.


Module sections

Introduction 5 minsIdentifying forms of legal business in Kenya

55 mins

Business Registration process 45 minsOther legal Requirements 20 minsDebrief 10 mins

Notes:

MODULE INTRODUCTION – 5 MINS

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In this module, Participants will identify and discuss the various forms of legal businesses in Kenyan, discuss the business registration process, identify all the legal documentations and registrations necessary to operate a business within the operating county and to explore the various business financing options.

LESSON 1: FORMS OF LEGAL BUSINESSES IN KENYA – 25 MINS

You now know enough about the benefit of doing business with the government and the types of goods you can sell to the government through a procurement process. To be successful, it is important to identify the various type of business, their structure, advantages and disadvantages. Therefore, it’s good to know these facts as a starting point, before you register your business, because you want to be sure you have chosen a business type that will suit your need as an upcoming business person.

Ndekezi and friends story

Ndekezi, 25 years old, stays in Lodwar, Turkana County. Ndekezi runs a small kiosk, where he sells products that serve his immediate community. He run this business alone, such that when he is committed to his farm, or goes on a journey, his business remains closed, and eventually affects his customers greatly. He started this business with personal savings, which he topped with money from his father. Even though he got the capital, it was not enough to launch his business as he had initially planned, since the capital was insufficient and as well he did not have other sources of capital at his discretion.

One day at a Trade Fair organised by the government and other stakeholders and held in Machakos County, Ndekezi met his former school mates, Kioko, Odoyo, Mwangi and Cherotich.

Kioko and Odoyo are currently running a stationery business in partnership, while Mwangi and Cherotich, registered a Limited Liability Company one year ago.

During their discussions about their businesses, Kioko and Odoyo were boasting of how easy it was to form their partnership, pulling resources together, availability of diverse skills and expertise, the risks are share between them as well as having close supervision to their business, and reduced management cost.

Ndekezi on his business is proud of having all the profits for himself, making quick decision since there is no one to consult or have a discussion with, and that he needed to follow few procedures to set up. The main challenges that Ndekezi faces are difficulties in raising financial capital, and difficulty in attracting investors.

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Mwangi and Cherotich, on their side were happy that they were easily accessing loans from banks, winning most of the tenders reserved for the youths, women and people living with disability. To them, doing business became fun and that they had employed two people to help them run their business successfully. They however, highlight the difficulties they encountered when they were registering their limited Company. Hey say the process was tedious and took them a longer period. Besides they talk of substantial amount required for registration.

Discussion tasks

From the above story, what are some of the advantages of the type of business that Ndekezi was operating?

Identify the similarities and differences between the business that Kioko and Odoyo were running to the one that Mwangi and Cherotich operated?

What are the difficulties encountered in registering a limited liability company in Kenya?

If you were to be given the business options mentioned in the story, identify the option you would prefer most, giving reasons for it?

LESSON 2: BUSINESS REGISTRATION – 80 MINS

Registration of new businesses in Kenya follow certain procedures. It is very crucial for individuals who are planning to have their businesses registered to be well acquainted with the procedures. The procedure include conducting a name search to your business name, having all the necessary documentations and duly filling all the required forms.

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[Facilitator Tips]

The lesson should be covered using group discussion approach

Divide participants to 3 or 4 groups,

Participants to take 45 mins generating ideas in their groups.

After the ellapse of 45 min call back the participant and have the groups share the points that each group came up with

Name SearchWhen you want to register a business in Kenya the first thing you need to do is conduct a name search. This is a must for all businesses. It costs Kshs. 100 per name and it takes three days. It is advisable to search for more than one at a time so as to save on time. The company name reservation lasts 30 days and can be renewed for a similar period.

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Partnership/Sole Proprietorship/ Limited Company Registration Process in Kenya

Having a resource person to handle this lesson will be most crucial. Participants under the guidance of the facilitator will pay a visit to the relevant government authorities that play various roles in youth empowerment. These Authorities include Sub County youth offices, County Youth offices under county government as well as National government.

Participants would be able to inquire on the process followed when one would like to register either a sole proprietorship, a partnership or a limited liability company.

Participants would be able to ask clarification on the need for name search.

As a facilitator, request the Officer being visited to avail the forms necessary for business registration, so that participants can have a look at them and know them. Participants who are willing to start the process of registration can therefore photocopy these forms, so as to begin the process of registering their businesses. This will also be the right place where participants could ask about the approximate cost that could see them through the registration process. Further, they should inquire the nearest places where they could register at.

LESSON 3: OTHER LEGAL BUSINESS DOCCUMENTS

What are the regulatory regulations in operating businesses in Kenya?

Once a business has been registered, there are other legal requirements that these businesses are required to meet. Some of these requirements are specific to the business types.

This session will map them out in a tabulated form or approach.

MODULE DEBRIEF

You just discussed the other regulatory requirements in running various businesses in Kenya. Which type of legal requirement is common among many businesses owned by the young people in your community?Why should your business comply with these requirements?Has your interest in business changed following what you learnt?If so, in which way?What are your plans moving forward?

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Facilitation TipsIt is recommended that in this section, the Facilitator should make prior arrangements with an officer from Sub County Youth office/County Youth office.If possible the facilitator to visit the Youth Offices, for participants to be able to seek clarification from the authorities concerned. This will enrich the content delivery of this section.

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MODULE 3, FINANCING OPTIONS Timing minutes




Look for relevant examples of legal procedures within the county of operation.

Outcomes In this session, Participants will be able to: Identify the various financing options available to them in their

local context Establish the eligibility criteria of the identified financial options


Purpose This module enables Participants to explore the various business financing options, available to participants in their local communities in Kenya as well as the eligibility criteria for each.


Module sections

Introduction 15 minsBusiness Financing Options 75 minsDebrief 15 mins

Notes:

INTRODUCTION – 15 MINS

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In Kenya currently there are and a number of financing options, in addition to the mainstream financial institutions such as Banks, Micro-finance Institutions and SACCOs. Most of these options are as a result of government interventions to promote entrepreneurship among the young people and women. Some of these interventions include Youth Enterprise Development Funds, UWEZO Funds, and Women Enterprise Funds among others.

At this stage have the participants generate a list of other programs by the government, NGOs or churches meant to provide financial services in the local community where they come from.

Generation of these programs at the community levels should take not more than 15 minutes.

LESSON 1: BUSINESS FINANCING OPTIONS – 75 MINS

Participants need to be well informed of the financial options for their businesses. Some of them are not aware of what the below financial services can offer to the. Therefore, a well-coordinated discussion along this line of thought would help in increasing the uptake to the available funds.

A few options will be discussed in this lesson and participants will required to come up with eligibility criteria in each of these option;

Youth Enterprise Development Fund (YEDF)

The on-lending component of the Fund mainly works through Financial Intermediaries such

as banks, Non-Governmental

Organizations (NGOs), Savings and

Credit Cooperatives (SACCOs), and

Micro Finance Institutions (MFIs).

The youth will access funds directly

either as individuals or as organized

entities such as groups,

cooperatives, companies among

others.

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[YEDF Eligibility Criteria]

The loan targets all forms of youth owned enterprises (individual, companies, groups, cooperatives or otherwise), Loan is accessible to any youth owned enterprise operating within the district, The loan is managed by Financial Intermediaries, The loan attracts interest rate of 8% per annum, Very flexible (soft), if any, collateral required, The loan amount is dependent on the nature of business proposed and the lending terms of the Financial Intermediary; 7. Financial Intermediary seeks approval for loan amount exceeding Ksh. 500,000

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In groups of 3, discuss and record in your note books the eligibility criteria for access Youth

Enterprise Development Fund. This should take you 20 minutes

NB: More information on Youth Enterprise Development Fund Can be obtained from:

http://www.youthfund.go.ke/

Women Enterprise Funds

What is women enterprise funds?

Women Enterprise Fund is a Semi-Autonomous Government Agency in the Ministry of

Devolution and Planning (formerly in the Ministry of Gender, Children & Social

Development) established in August 2007, to provide accessible and affordable credit to

support

women start and/or expand business for wealth and employment creation. The Fund also

provides business support services such as capacity building, marketing, promotion of

linkages and infrastructure support. (http://www.wef.co.ke/)

Capacity Building of Women entrepreneurs

The Fund achieves capacity building of women entrepreneurs through the volunteerism

concept. The Fund works with volunteers at constituency level whose roles include

recruiting women, training them and monitoring their projects and loan repayment.

The volunteers are thus tasked with recruiting and training the Fund’s beneficiaries on a

curriculum that covers various areas including:

1. Business skills

2. Market Access

3. Basic ICT skills

Again in a group of 3, discuss and record in your note books the eligibility criteria for access

Women Enterprise Fund. This task should also takes you 20 minutes to accomplish.

UWEZO Fund

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http://www.wef.co.ke/

http://www.youthfund.go.ke/

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Uwezo Fund is yet another fund that comes as a result of government intervention. It is a flagship programme for Kenya’s vision 2030 aimed at enabling women, youth and persons with disability access finances to promote businesses and enterprises at the constituency level, thereby enhancing economic growth towards the realization of the same and the Millennium Development Goals No.1 (eradicate extreme poverty and hunger) and 3 (promote gender equality and empower women).

The Fund is meant to expand access to finances and promote women, youth and persons living with disability led enterprises at the constituency level. It also provides mentorship opportunities to enable the beneficiaries take advantage of the 30% government procurement preference through its Capacity Building Programme. Uwezo Fund, therefore, is an avenue for incubating enterprises, catalyzing innovation, promoting industry, creating employment, and growing the economy. (http://www.uwezo.go.ke/)

Now we are going to identify the objectives of the funds.

Why was this fund established? This task should take not more than 10 minutes.

Eligibility Criteria for Applicants.

What does an applicant need in order to qualify for Uwezo Fund loan?

Now in a group of not less than 3 and not more than five, come up with eligibility criteria for accessing Uwezo Fund.

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[Objectives of UWEZO funds

1. To expand access to finances in promotion of youth and women businesses and enterprises at the constituency level for economic growth towards the realization of the goals of Vision 2030;

2. To generate gainful self- employment for the youth and women; and

3. To model an alternative framework in funding community driven development.

Facilitator Tips (Eligibility Criteria)

(a) For a group1. Is registered with the department of social

services, Cooperatives or the Registrar of Societies2. Has members aged between 18 and 35 years

whereas the women’s groups shall be made up of women aged eighteen years and above

3. Is based and operational at the constituency it seeks to make an application for consideration

4. Operates a table banking structure or any other group fund structure where members make monthly contributions according to the groups’ internal guidelines (evidence of monthly contributions shall be a requirement);

5. Hold a bank account in the name of the group.(b) For an institution1. Is a registered entity2. Has listed youth and women groups within it.

http://www.uwezo.go.ke/

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This task should be done in two categories. The first category should be eligibility criteria for a group such a youth group, women group or a group owned by person’s living with disabilities. This task should take between 25 to 30 minutes.

Every member of a group discussion should be as active as possible. As a facilitator, ensure that every participant benefit from group task.

NB: For more information on eligibility criteria, go to: http://www.uwezo.go.ke/how-to-apply

LPO Financing

LPO is another approach that can used by the suppliers to finance the tender that they have secured.

We will learn more on LPO financing in our next class.

MODULE DEBRIEF

What are some of the business financing options available in this community?To secure business financial service from Youth Enterprise Fund (YEDF) what are the eligibility criteria?What are the main objectives of Uwezo Funds?

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http://www.uwezo.go.ke/how-to-apply

http://www.uwezo.go.ke/how-to-apply

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MODULE 4, LPO FINANCINGTiming

minutesPreparation

Read through the module to get a sense of the flow and to gain an understanding of the key concepts and terminologies



Outcomes In this session, Participants will be able to: Define what LPO Financing is, Give the advantages of LPO Financing, Give the Requirements of LPO Financing, and Identify some of the Institutions offering LPO Financing services in

their areas.Methods The methods to be used in delivering this module includes:

Facilitation Group discussions Assigned tasks (Individual assignment).

Purpose This module enables Participants to have understandings on the LPO Financing and some of the various financial institutions offering LPO Financing services in Kenyan, as well as the requirements needed for an individual to secure LPO Financing for tender.

Materials Notebook Flip chart Markers

Module sections Introduction/welcome 15 minsLPO financing, and its users 40 minsLPO Financing requirements 80 minsDebrief 15 mins

Module notes:

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WELCOME

In this module, Participants are going to learn and understand more on the LPO Financing, some of the various financial institutions in their local areas, offering LPO Financing services, as well as being able to identify and list the requirements needed for an individual to secure LPO Financing for tender.

LESSON 1 – LPO FINANCING

In this lesson, participants will learn about Local Purchase Order (LPO) as an alternative financing to tender work.

This will enable participants have variety of options that they can use in to finance their mega business activities, especially doing business with the government, which normally require a big capital outlay and payments is always done upon completion of the business/contract.

What do you understand when you hear about LPO?

Purchase order financing is a short-term commercial finance option that provides capital to pay suppliers upfront for verified purchase orders.

In light of these statement, identify some of the benefits that business men in your community get from LPO financing?

Who uses it?

Purchase Order financing is designed for growing businesses that want to fulfill large orders. They have little access to working capital and/or poor cash flow.

Facilitator to ask questions that will arouse participants into identifying individuals and originations in the local environment who the beneficiaries of LPO financing.

The condition on whether to offer the service to a startup or an established business on the offering financial institution.

Giving clear reasons and example, participants need to identify some of the differences that exist between LPO financing and traditional ways that businesses and organizations used to finance their projects and ventures.

Facilitation TipsSome of the people or institutions using LPO services include;

Manufacturer Distributor Wholesaler/reseller Importer/exporter

Facilitation TipsUse facilitation approach, to handle this lesson. Involve all the participants as you make the session as interesting as possible.

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LESSON 2 – LPO SERVICES OFFERING INSTITUTION

Now divide participants into groups of manageable sizes. In these groups participants are going to take 20 minutes discussing and exploring the benefits /importance of using LPO as a means to finance tender.

During this exercise, participants will raise their ideas in a group, but however record in note books individually.

When 20 minutes are over, let the participant stop the exercise.

Add them another 20 minute. This time round they are going to use this time to explore some of the challenges that accompany the use of LPO financing.

Let them list also these challenges in their note books individually, but discussing in a group.

Finally, at the end of the time allocated, let participants give the points they had raised in group discussions, as you list them on the flip chart in the next 20 mins.

MODULE DEBRIEFWhat did you learn today that you didn’t expect to learn?What is different from your earlier expectations of the course and the expectations you have now?What would you like to share about the experience?So what would you give LPO Financing a trial?How do you expect this experience will help you realize your learning and growth goals?What more do you want to know about the course or the course topic at this point?

INDIVIDUAL WORK

Take your time and visit the nearest Financial Institution and inquire whether they offer LPO Financing Service.

If they offer LPO Financing services what are their conditions to the beneficiaries,

What are the benefits of their LPO financing,

How long does it take for the actualization of the LPO Financing from the time of application?

Facilitation Tips Benefits of LPO

financing: Immediate access

to the proceeds of sales

Simple operational procedures

Cheaper additional working capital

Simplified security requirements

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APPENDICES

Appendix 1: Specific requirements for operating business in Kenya

Requirement How often(frequency)

Businesses applicable


Single business Permit Every year All businesses in Kenya

County Government.

Trade License Issued under Trade Licensing Act (Cap 497). One has to provide:

- A tenancy agreement/ lease/ or title deed of the business premises;

- identity card or passport- Personal Identification

Number (PIN);- Certificate of incorporation or certificate of

registration of business name.

Every year All businesses.

Ministry of Trade and Industry

Value added Tax (VAT) No. Once All businesses KRA

Personal Identification Number (PIN) Once All businesses KRA

National Social Security Fund (NSSF) No Once All businesses employing more than 5 workers

(NSSF), Ministry of Labour.

National Hospital Insurance Fund (NHIF) No. Once All businesses employing more than 5 workers

NHIFMinistry of Health

Environmental Impact Assessment No. Every year All manufacturing and processing businesses

National Environmental Management Authority (NEMA).

Source: Kenya’s Hand Book for local Investors viewed from: (http://www.investmentkenya.com/resources/publications?download=8:handbook-for-local-investors)

Appendix 2: Additional requirements for operating specific businesses in Kenya

Business type Requirement How often Responsible Agency

Horticultural -Export permit Every time Horticultural

http://www.investmentkenya.com/resources/publications?download=8:handbook-for-local-investors


AGPO version 1

products. - Compliance to traceability of produce, hygiene, Maximum Residue Level(MRL), Good Agricultural Practices (GAP) and proper post-harvest handling procedures.

exports are made

Crops Development Authority (HCDA).

Live animals export

Health Clearance Certificate Every time exports are made

Department of Veterinary Services.

Motor vehicle components or accessories.

Dealers license Every year. County Government

Used motor vehicles.

Buying or selling business license. -Certificate of Roadworthiness for used vehicles originating from Japan and Dubai.

Every year.Every time imports are made.

County Government,Ministry of Transport

Public transport -Public carriers license-Road license

- Transport Business License (TBL)

Every yearEvery yearEvery year

Ministry of Transport,

KRA

Scrap metal License under Scrap Metal Act. Every year Ministry of Trade and Industry

Fishing -Certificate of registration of fishing vessel.

-License to catch fish under Fisheries Act.

Every year

Every year

Department of fisheries.

Processing and Export of Fish.

-Processing license-Fish movement permit

- Certificate of compliance with KEBS for fish handling and processing

-Export permit- Health certificate.

Every yearEvery time exports are made.

Department of fisheries.

Hotel/ restaurant business.

-Hotel/ restaurant license.-Restaurant manger’s

license- General retail liquor license.

Every year County Government after providing a certificate of health.

Food business (selling, reparing)

License to use premises for that purpose.

Every year County Government

Milling of Maize Miller’s license Every year National Cereals and Produce Board.

Coffee buying, License to carry out the relevant Every year Ministry of

AGPO version 1

selling, milling, warehousing or exporting

transactions.

Movement permit.

agriculture

Dairy - Registration under the Dairy Industry Act.- Dairy manager license.

- Registration of premises as a dairy. - Milk Purveyor license.

Every year Department of Veterinary Services.

Hides, skin and leather.

-Buyer’s license.-Exporter or importer license.-Registration certificate for the

premises under Hides, Skin and Leather Trade Act.

Every year Department of Veterinary Services

Bacon factory License under Pig industry.- License to slaughter Pigs.- License to keep pigs.

Every year Department of Veterinary Services


Appendix 3: Regulatory requirements for MSEs

Requirement How often(frequency)



Hawking. - License Given on production of:• Identity Card

• Certificate of good conduct - A fee depending on the County in each county.

- Hawking to be done on designed areas


Bulk agro businesses

Including

• Vegetables

• Fruits

- License

- Pay a fee depending on county’s rates

- One operates in a designated market in cities or towns e.g. Wakulima Market in Nairobi.

-Every year

-Every time one sells from the markets.

County Government



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• Grains

• Potatoes

• Tomatoes

Jua kali products including:

Motor mechanic

Engineering

Manufacturing industries

- Single business permit- Fee

- One operates in designated areas, or in,

- Jua kali sheds

Every year

Monthly fee as per the county’s rate

County Government

Paper & paper products, printing & publishing

- Single Business Permit given on production of:

• Physical address• Certificate of good conduct


Textile, wearing apparels & leather product shops

- Single Business Permit given on production of physical address


Wood, wood products and carpentry

Single Business Permit Every year Ministry of Environment,County Government

Whole sale & retail trade

- Single Business Permit- Trade License


Restaurant and hotels

- Single Business Permit- Trade License

Every year County Government and Ministry of health.

Textile and tailoring - Single Business Permit- Trade License





Documents

AGPO Final