State mulls Sh10b boost for MSMEs

The Ministry of Investment, Trade, and Industry (MITI) has joined forces with the Kenya Development Corporation (KDC) to kickstart the Supporting Access to Finance and Enterprise Recovery (SAFER) project.

Spearheaded by MITI Cabinet Secretary (CS) Rebecca Miano (inset), this initiative aims to mobilize Sh10 billion to boost economic growth and empower small businesses.

During the SAFER project launch, CS Miano emphasized MITI’s commitment to support KDC in mobilizing resources for vital investment projects spanning various regions.

Empowering traders

Micro-enterprises will access loans ranging from Sh7,000 to Sh150,000, while small enterprises will receive loans ranging from Sh150,001 to Sh250,000. These financial boosts aim to empower MSMEs to effectively manage their cash flows and pursue growth opportunities across various sectors, including trade, pharmaceuticals, transport, and manufacturing, thereby stimulating economic growth in Kenya.

Simon Chelugui, the CS for Cooperatives and MSMEs, highlighted SAFER’s commitment to providing vital financial support for MSMEs’ working capital needs, such as salaries and rent expenses.

Interventions will be tailored to address the specific requirements of MSMEs, encompassing initiatives to enhance financial literacy, facilitate credit access, and foster partnerships with financial institutions across diverse sectors and regions.

The project, a collaborative effort between KDC and the World Bank, aims to bolster Micro, Small, and Medium Enterprises (MSMEs) through comprehensive policy reforms, innovative financing solutions, and capacity-building initiatives.

Norah Ratemo, Director General of KDC, highlighted the role of the SAFER project in addressing market failures in MSMEs’ access to finance, particularly amidst the economic challenges exacerbated by the COVID-19 pandemic and global economic uncertainties.

Supported by the National Treasury, the project will disburse funds through the Nawiri wholesale loan facility to SACCOs regulated by the Sacco Societies Regulatory Authority (SASRA), licensed Microfinance Institutions, and Tier III commercial banks focused on MSME lending.

Acknowledging the challenges faced by MSMEs in securing funding from Private Financial Institutions (PFIs), CS Miano emphasized the importance of dismantling financial barriers through SAFER’s multifaceted strategy.

This strategy entails expanding the reach of PFIs, bolstering their capacities through comprehensive training and support, and leveraging technology to integrate digital platforms, thus ensuring widespread accessibility to financial resources for MSMEs.