IN a bid to bolster its small and medium enterprises (SMEs), Kenya has launched a groundbreaking project worth $51.7 million funded by the World Bank. Rebecca Miano, the cabinet secretary in the Ministry of Investments, Trade, and Industry, made the announcement in Nairobi, detailing the Supporting Access to Finance and Enterprise Recovery project’s objectives.
Miano disclosed that the initiative will provide concessional loans to participating financial institutions, including microfinance institutions, digital lenders, and savings and credit cooperative organisations. These loans are intended for onward lending to small entrepreneurs, addressing the pressing need for accessible financing in the SME sector.
‘The tenor for microloans is expected to not exceed 18 months, and for small loans, it will not exceed three years, providing flexibility for small enterprises to manage their cash flows,’ Miano emphasised. She further highlighted that beneficiary enterprises stand to receive loans ranging from KSh7,000 (about $50) to KSh250,000 (about $1,792), catering to varying business needs.
Alwaleed Alatabani, the practice manager of financial competitiveness and innovation for East and Southern Africa at the World Bank, underscored Kenya’s significant SME funding gap and the challenges associated with low credit access in the private sector. He affirmed the World Bank’s commitment to providing technical and advisory support to enhance the efficiency of participating financial institutions in lending to SMEs, thereby facilitating sustainable economic growth and entrepreneurship in Kenya.