5 Ways To Raise Capital For a Small Business In Malawi; No Bank Loan

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Many people in business today can admit raising capital for a small business in Malawi is difficult.  As we know, apart from having a good business idea, a person need capital to start and manage a business. 

We all know, capital is the engine of a business. For example, a business needs money to hire staff, pay for rentals, recurring expenses and transport costs. 

Consequently, lack of capital is a challenge that can lead to total hinder someone from implementing their well thought out business idea.

Despite the said fact that many people struggle to finance businesses, not all hope is lost. We have some alternatives to use to raise capital for small businesses. If you have been thinking on what to do to find some capital, read on, I have something for you today.

In this blog, I will share with you five proven ways to raise business capital without relying on bank loans.  

business in Malawi loan

I know banks are very helpful. However, with 29% access to formal financial services, accessing bank loan not easy for Malawians especially youths and women. Therefore, I believe we need to leverage other methods of raising capital for small businesses.

Having said that; Let’s move on!

Personal Savings as capital for small businesses in Malawi

Fist option is using personal servings. Many people who are in businesses in Malawi and elsewhere financed their small business using personal savings. 

In Malawi, generally speaking, we have a culture that does not promote the money saving habits.

Even though such is the case, saving money is one of the widely ways recommended to raise business capital. Everyone can save money, right?

For instance, employees can save from salaries, allowances, farmers can save from crop sales, and artists can save money from performance revenue.

As the bible mentions, each person is encouraged to save then invest into a business. The important thing about saving is that it teaches a person to be financially disciplined which is a good habit for in business.

Gospel Kazako the former managing director of Zodiak Radio and Television was a civil servant working with the state broadcaster MBC, was serving some of his earnings until he had enough to set up his own broadcasting giant.

Using other people’s money legally

Another method is using other people’s finances.
Let face it, some people earn far too little such that it would take an infinite time to save enough to start a business.

In situations where accumulating capital through savings is not viable, consider using other people’s income. This can be done by negotiating a win win deal with the potential contributors. However, this may not work for people who have bad records with money management. It is had for anyone to trust a person who is known to squander money unnecessarily.

An important prerequisite to having other people allow one to use their money is trust. Trust is the currency.

Individuals or institutions may at times offer financial support to a person of integrity with good money management skills and good people-skills.

Ideally people of good will have interest to know how well the money will be used and need an assurance that their resources will be paid back in time. 

In arrangements like these money can be given as grant, or a soft loan without interest.

For example, parents can fund their child start the business without requiring the an interest or payback. A good example is Donald Trump, he started his real estate with capital he borrowed from his father.

Another example, Prophet Shepherd Bushiri disclosed during a radio interview that he started his farming investments using money his father gave him. 

Millionaire Napoleone Dzombe also started his entrepreneurship journey with money his father gave him. In fact his father gave Dzombe a cow, he sold the cow to start his farming business.

The good thing with using relatives money is that in most cases you will repay the money without interest. Repaying without interest gives the business opportunity to grow without facing external pressure in its early stages.

Sell idle items and extra staff that you don’t need  

Furthermore, a person can raise capital by selling things he or she has but are rarely used.

Knowingly or unknowingly some people complain of lacking capital while they have resources which they transform into capital. I hope you have an idea already what this pointing is driving to.

The example below illustrates the situation how it can happen in real life.
Assume a person, Chisomo, wants K100,000 capital to start a small business like ordering goods from China online.

Now, imagine Chisomo owns a K200, 000 worthy phone, 10 pairs of formal shoes each costing K10,000, and earns K100, 000 a regular monthly salary.

Do you agree that Chisomo would ably raise capital by selling some of his belongings? 

The above scenario is imaginary, but I know it happens. It reflects lives of many Malawians who complain of lack of capital to invest in a small business.  

I regularly meet people like Chisomo. 

Some people have enough resources which they can convert to the required start-up capital but they sometimes do not know or at times they are not willing to do so. 

Instead, people like Chisomo complain, stating lack of capital as an excuse they fail to start a business.
I guess you are not like Chisomo.

Quick questions

Do you have two TV sets in your home?
Have you a car that stays months without using it?
Do you keep furniture that you can do without?
Are you owning clothes that it takes years before you wear them?

A yes to any of the above questions or related questions signifies that a person has enough properties that can be sold to raise capital for a viable business in Malawi. Some other people may just need some motivation to release idle properties and take the risk to invest it into a viable business idea.

I can assure you. It is a common habit in our culture to accumulate property that we rarely used, sometimes, it is due to peer influence.

Trust me, selling idle property is one way to quickly raise capital for a small business.

Upon maturity of the business, such properties can be bought a gain easily.
One of the world’s richest man in history, Andrew Caneige sold a house to start his steel company business which later grew to become one of the largest rail companies in the world during his time  

Selling Talents and Skills as capital for small businesses in Malawi

As you may be aware, each person has some unique in-born talents or some distinct skills which he or she can develop . It is the ability of each person to nature their talents and skills soon after discovering them. The earlier a person discovers their talent the better.

These natural talents if perfected continually can be traded for cash which can be used as capital to start small businesses in Malawi. Some of the skills that artists can trade for cash includes; singing, dancing, writing and public speaking 

As an individual, once you know your talents, it’s important to invest in them and find means of earning through provision of such talents to clients.

Are you good as singing or playing musical instruments?
Record quality music, then sell  
Do you write engaging content?
Write books, blog, or magazine that you can sell.
Are you talented supper league player?
Do you have good skills at fixing electronics equipment?
Are you a skilled digital marketer?

Many world class artists are also entrepreneurs but they raised through the utilization of their talents. Do not shy to charge for your talents or skills. Do not deny yourself the reward of your hard work. 

Jay Z is one of the World’s success business person who earned a good portion of his business capital from procedures of his musical career, the same is with Akon.

Apply for grants or seed capital

Lastly, one can find money for starting a small businesses in Malawi by looking for start up investors.

Business pitching is commonly taught in business schools. Even though, you may have never studied business related courses, you finding it rewarding to spend some time to learn about pitching.

Business pitching is an important skill that if mastered can completely changes turn tables for your business.

In simplest terms a business pitch is an ask for capital from investors or donors to support business growth

There are some organizations that offer opportunities for small business to pitch business ideas, where the winning ideas get start-up funding.  
Considering stiff competition out there, a person needs to pitch a unique business idea that is innovative, creative and solves societal challenges in sustainable ways. 

It is important to note that organizations are mostly interested in funding registered and bankable businesses. This highlights the importance of establishing a formal business.

In this article I have suggested five possible ways to generate capital for starting small businesses in Malawi without getting a bank loan .

I would be interested hearing your thoughts on the the subject. Drop a comment below


  1. Dominic Nzundah
  2. Lameck
  3. timothy makoko
  4. Nini Ruebush
  5. Bright Chima
  6. Polite
  7. david kulapani
  8. Hendrix Bilima
  10. Abel chirwa
  11. Lustico Kumbutsani
  12. Steven Mauluka
  13. Pempho S jr
  14. Pride Kanyika

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