My name is Lucas. I am a police constable based in the Nairobi metropolitan area. I am married with two children. I earn a basic salary of around Sh33,000 and total earnings of about Sh53,000.
However, I have total deductions of about Sh46,000 that leave me with a net pay of about Sh7,600. I have a commercial loan deduction of about Sh30,000, and other general deductions of about Sh15,800 including pension, NSSF, PAYE, housing levy, SHA and Sacco.
The commercial loan deduction is for a loan of Sh1.5 million which I took to buy a second-hand Toyota Hiace matatu. I sold it after six months at Sh1 million due to recurrent mechanical problems and poor revenues. I used this money to open a small cereals business for my wife upcountry, refurbished my family’s furniture and bought my family a new and bigger flat screen TV, a fridge and an electric cooker with an oven.
I also bought two dairy cows for my mum. The cereals business is yet to break even and cannot sustain my family upcountry. From my net of Sh7,600, I send my wife Sh5,000 monthly which leaves me with about Sh2,600.
I survive hand to mouth and I’m forced to look for money elsewhere to meet my needs. Please advise me on how I can get out of this hole.
Rhina Namsia, the founder and Chief Executive Officer of The Acemt Consulting, a training and consultation company that provides financial planning and investment advisory
Your situation is difficult but not uncommon. It features heavy debt, limited income, and well-intentioned decisions that didn’t pay off. Whatever the situation, you need to find solutions and forge forward. It is admirable that you have acknowledged the problem exists and shown resilience, responsibility, and a deep commitment to your family.
You have tried to invest for a better future, which is admirable too. While the results haven’t yet matched your efforts, it’s not too late to rebuild your finances.
You need to gain control of your net income, avoid further losses, add at least Sh10,000 to Sh15,000 per month to your net income, consolidate or refinance your loan, and start raising an emergency cash fund.
With Sh7,600 net, every shilling must have a job. Do a zero-based budget which prioritises only the essentials. The non-negotiables here include rent (if you are not housed by government), food and transport (reduce to absolute minimum), wife's support (can she accept slightly reduced remittances temporarily until things stabilise?) Reduce the Sh5,000 remittance to Sh3,000 for a few months. Explain the situation openly to your wife. This gives you Sh4,600 per month to work with from Sh2,600. Limit all non-essential spending. Use cash only, no Lipa na M-Pesa or digital credit as the seemingly small charges add up to a day’s meal sometimes.
Evaluate the debt. The commercial loan is the biggest strain. Sh30,000 per month is 57 per cent of your gross income. If this is a bank loan, visit the branch immediately and ask for loan restructuring. They should only allow a third of monthly payments out of your net income which is about Sh18,000 per month. You could seek extension of tenure to reduce the monthly payments, or a temporary payment holiday. Ask to negotiate new terms or spread repayment over more time. The goal is to bring monthly repayment down from Sh30,000 to about Sh20,000 and free up critical cash flow.
The cereals business isn’t profitable yet but don’t shut it down. Ask your wife for a weekly sales report to track the actual profits. If possible, move her to sell directly at markets to get higher margins. Encourage her to be proactive or even do door to door sales instead of waiting for customers to come to her. Avoid reinvesting into stock from your salary but let the business self-sustain or pause. Consider adding a mobile money agency or a M-Pesa sub-agent line to the shop as it could bring in small commissions daily.
Check your Sacco status to see if you have shares or guarantee capacity you can use to apply for a refinancing loan at lower interest, or consolidate your commercial loan under better terms. But only do this if it reduces interest and monthly payments. Avoid deepening debt to finance consumption.
You’re forced to look elsewhere to sustain yourself every month. This means you’re living beyond your means. Look for ways to increase your income. Your situation needs Sh10,000 to Sh15,000 per month in new income to break even. Small consistent earnings will help achieve that. The options can include an evening or weekend gigs like providing private security for events, bodaboda agent, tutoring, or online transcription if you are tech savvy and have the accessibility.
In times of distress, sometimes one has to downgrade. Can you sell one cow since they are not producing milk for commercial purposes? Can the TV be swapped for a basic one? This isn’t failure but a survival strategy.
Have honest conversations with your wife and mum. Let them know you're restructuring and not giving up. Tell them your goal is to clear the loan, stabilise the business, and increase support later.
Once the loan is under control you can resume saving via Sacco or Money Market Fund regardless of how little the amount is, and then reinvest in the cereal business. Nothing will change overnight but with small calculated steps you will achieve your freedom.
My business is failing despite injecting Sh1m loan and savings, do I quit and return to employment?
My name is Virginia. I was employed in the private sector with a gross salary of about Sh60,000. I quit this job in January 2025 to start a clothing and beauty business targeting professional working women in Nakuru’s Central Business District. I used my savings of Sh600,000 as my start-up capital. I then injected Sh400,000 bank loan into the business in April.
My expenses are as follows: Rent Sh16,000, Utilities Sh5,000, Phone Sh2,500, Food Sh25,000, Commuting Sh5,000, Church Sh6,000, Personal grooming Sh5,000, Fees Sh10,000 per month for my son, Rent shop Sh20,000, Employee Sh15,000, tenant security guard contribution at shop Sh2,000, merry-go-round women chama Sh10,000, KCB-MPesa loan Sh6,500. Despite putting in about Sh1 million into the business, I am still struggling to live within the same standards I was used to before I left my old job.
The bank loan is for a term of one year in instalments of Sh36,000. I have repaid two months.
The mobile loan recurs every month. I have a lot of dead stock that is not moving and I am wondering what I did wrong. I am not certain I will manage to pay next month’s loan and I’m considering taking a top up loan of Sh250,000 to jumpstart the business or selling my Sh136,000 Home Afrika shares which I bought at 1.10 apiece at a loss and inject the money in the business instead. Other than the shares I have no other investment or savings.
I am also considering quitting and seeking employment again. I don’t even know how much money I am making from this business. Everything seems so overwhelming and I don’t know how to untangle myself. Please advise me.
Benjamin Cheruiyot – the Engagement Lead at Abojani Investments, a personal finance and investments advisory firm
First, it is important that you understand that you don't have to quit your job to achieve wealth. Many professionals can build massive wealth not just by working hard, but by working smart.
It's generally recommended that you get into business while still in employment. Only when the business net returns double your salary should you consider quitting to focus on further growth of your business.
Entrepreneurship is often glamorised, but is not a walk in the park. Whereas in employment you don't have to make hugely consequential decisions, in a sole proprietorship, the business trajectory lies on you.
You are the chief executive officer, the chief finance officer, salesperson, storekeeper, and cleaner. There is no guarantee of income unless you put on the overalls. Every day counts in business. You do not have the luxury of taking leave. To be really wealthy, the business structure plus strategy are the deal maker.
Now, your total monthly expenses amount to Sh128,000. There is also the bank loan repayment of Sh36,000, totalling Sh164,000. It is the third month of business and you are already feeling the pinch of entrepreneurship.
You have questioned whether you did proper due diligence before quitting your job and plunging into business. Typically, you do a business hypothesis first. Did you check out market potential, existing competitors, business location, current trends, and strategy?
Assuming you did all these, we could just assume it's ordinary start-up challenges that characterise SMEs. It takes about a year for an SME to get on its feet. Building a loyal repeat customer base takes time.
You will need a lot of referrals from existing clients and soft marketing skills to start gaining solid traction. Pricing is key, although this depends on where you source your merchandise. It is better to be content with small profit margins but enjoy constant and growing volumes in sales.
A business emergency fund is necessary. In your case, the most important business expenses are rent, employee wage, and loan repayment.
These total Sh71,000 monthly. You need at least Sh210,000 as business emergency funds to take care of these expenses in slow months. An ideal place to keep this is a money market fund. It's a medium-term strategy that you can grow from savings especially in good months with interest that is compounded on a daily basis.
There are lots of personal expenses you could review to steady your ship. Look at foodstuffs which you have currently allocated Sh25,000.
If living with your son only, you could evaluate your shopping habits. Stock more dry foodstuffs especially in bulk. Smaller package purchases are expensive.
Could you defer the expense on church and chama contribution until you're stable? All these could release Sh25,000 that you could channel towards more pressing needs like eliminating recurrent mobile loans.
Unless the business nets Sh200,000 monthly, it may not be sustainable in the short term. Selling the 123,000 Home Afrika shares at the current price of Sh0.64 could get you about Sh78,000.
This may not do much but help pay off two monthly loan installments. It is only a temporary relief. It is also a lesson in stock market investing.
Always speculate on quality holdings where you'll enjoy dividend income besides capital appreciation instead of penny stocks which will give you a huge volume but low returns, and more often than not, paper losses that your portfolio can’t seem to recover from.
I would also advise that you do not take the Sh250,000 loan top up to put into your business for now. This will just add you more debt without resolving the fundamental reason why your venture is frail.
Never mix personal and business finances. Even if taking from the business for personal needs, consider it an expense, like a salary. However, in the initial growth phase, businesses take more than they give.
A knowledge of business accounting will help you know projections on your business break-even horizon. If you do not know how to run proper bookkeeping, you might want to have a professional conduct an analysis on the business that will determine its actual financial status including operating capital, expenses, revenue, net profit and losses.
This will help you make an informed decision on whether you should bite the bullet and go back to salaried employment or whether your business will grow in your absence.
If it is a zero-sum game, you must know that there is no shame in starting over. You should not allow your ego to keep you stuck in a loss-making, debt-piling venture that has no real chance of turning a profit.
If you decide to go back to employment, you will need to be strategic with your finances to ensure you continue to honour your monthly debt obligation. This may require you to reorganise your budget and make cuts on some areas.
Depending on what net salary you are able to negotiate for, you might want to involve your bank on a non-costly loan restructuring so that you don’t overburden your payslip.
This switch from business to employment should be done strategically, and possibly involve a professional, to avoid sudden, disorienting closures and losses, as well as establish potential of the business running as a side hustle in a different, more affordable location and, or even online and on weekends.
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