A Project To Boost MSMEs Access To Finance Launched

by Business Watch Team

The Government of Kenya, through the Kenya Development Corporation (KDC), the Ministry of Investment, Trade, and Industry (MITI), and the National Treasury, has launched the Supporting Access to Finance and Enterprise Recovery (SAFER) Project.

The project seeks to increase access to financial services, enhance capabilities, support the recovery of Micro, Small, and Medium Enterprises (MSMEs) after COVID-19, and foster long-term growth.

“The SAFER project will break down financial barriers for MSMEs through policy reforms, innovative financing, and capacity building. We are confident that through this initiative, we will ignite a spark of economic revitalization across Kenya,” Cabinet Secretary, Ministry of Investments, Trade and Industry Rebecca Miano said.

SAFER will provide innovative financial solutions and support to MSMEs through a combination of market instruments channeled via the private sector and the Government.

The funds will be channeled from the National Treasury to an apex financial institution (KDC), which will on-lend to several Participating Financial Institutions (PFIs), including Licensed Micro Finance Institutions, Central Bank of Kenya Licensed Digital Lenders, and SACCOs, in turn, will on-lend to MSMEs. Formally referred to as Nawiri wholesale Loan, KDC will disburse this facility to SASRA-regulated SACCOs, Licensed Micro Finance Institutions and Tier III commercial banks focused on lending to MSMEs.

“Through SAFER, we aim to address market failures in access to finance by MSMEs in Kenya. This project comes at a crucial time as businesses continue to grapple with the economic fallout from the COVID-19 pandemic and multiple economic shocks occasioned by geopolitical tensions across the world,” KDC Director General Norah Ratemo Said.

SAFER project is designed to address the pressing needs of MSMEs by providing essential financial support for their working capital requirements, including salaries, rent expenses, and more.

“Interventions will be tailored to address the specific needs of MSMEs across various sectors and regions. This may involve enhancing financial literacy, facilitating credit access, or fostering partnerships with financial institutions. Our goal is to equip MSMEs with the tools and resources they need to succeed,” Cabinet Secretary Co-Operatives & Micro, Small, And Medium Enterprises Simon Chelugui said.

Through SAFER, individual microenterprises will access loans ranging from KES 7,000 to KES 150,000, while small enterprises can avail themselves of loans ranging from KES 150,001 to KES 250,000. Microloans will have a tenor of up to 18 months, while small loans will extend up to three years, empowering MSMEs to manage their cash flows effectively and pursue growth opportunities.

“This Project represents a significant step towards supporting MSMEs in Kenya during these challenging times. By providing access to finance and fostering enterprise recovery, we aim to create a more resilient and inclusive economy,” KDC Chairman of the Board of Directors Dr. Bunyasi Sakwa said.

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