Agency to engage SMEs over access to cheaper loans
By Herald Aloo, June 2, 2022
Kenya Development Corporation (KDC) has launched an engagement plan with small and medium-sized enterprises (SMEs) in the manufacturing sector that will see businesses access cheaper loans compared to commercial banks.
The initiative is part of the wide array of efforts by the government to support the recovery of the SMEs which were adversely impacted by the pandemic and are still struggling to access finances due to the strict risk-based lending principles used by most banks.
“It is essential to expand and adapt our approach to SME financing and ensure that their operations continue without any interruptions. This is part of our efforts to consistently add value by offering financial and non-financial services,” said Judith Omachar, Deputy Director, Business Development.
KDC will work closely with the Ministry of Industrialisation and Kenya Association of Manufacturers to map out interested manufacturers countrywide.
The drive will allow SMEs to acquire credit through project finance, get working capital, asset finance, and guarantee schemes. National Treasury announced in March that Sh2 billion has been injected into the Credit Guarantee Schemes which was established in 2020 to boost access to quality and affordable credit for SMEs growth.
This was done in collaboration with eight selected commercial banks that would be compensated for up to a quarter of losses caused by SME defaults.