Kenyan business owners are facing a big challenge of operational costs and over-regulation.
Kenya Bankers Association president John Gachora said businesses that currently account for a third of Kenya’s GDP are subject to regulation and 60% of business people are frustrated with compliance, hampering their ability to innovate and expand.
The sector’s outstanding debt is estimated at Sh70 billion, affecting business value, and supply chains and making credit less available to MSMEs.
Speaking at the 2024 Kenya Bankers Association (KBA) Inua Biashara Fair in Nairobi, Gajola said the banking sector would allocate KSh150 billion annually over the next three years to provide loans to MSMEs addressing business challenges.
The bank, through its chairman, also approved a plan to convert the loan guarantee into a private company with the government as a minority shareholder. As of June 2024, the programme had benefited over 4,000 beneficiaries in 46 counties, with Sh6.29 billion disbursed.
Gachora said the model has proven successful in other industries and can be replicated locally to realise the full potential of MSMEs.
“I commend the banking industry’s pledge to double lending to MSMEs by providing KSh150 billion in new loans annually, beginning in 2025. Accordingly, the government will support this bold and innovative move through policy and institutional backing, including measures to guarantee the prompt payment of all pending government bills, which will commence once the ongoing verification process is completed,” said President William Ruto.
The Inua Biashara MSME Exhibition 2024, organised by the Kenya Bankers Association (KBA), brings together business owners, financial institutions and government officials to focus on supporting MSMEs through financial solutions.
The exhibition provides MSMEs with the opportunity to engage directly with banks and receive essential products designed to meet their needs.
