The Vital Role Of Banks In Supporting SMEs In Kenya

by Business Watch Team

Small and Medium-sized Enterprises (SMEs) are the lifeblood of Kenya’s economy, contributing significantly to employment, innovation, and economic growth over the years.

SMEs in Kenya employ 86 percent of the population according to the Kenya National Bureau of Statistics (KNBS) and contribute about 45 percent to the country’s gross domestic product. With the unemployment rate at 2.94 percent from 2.89 million in September, according to data from the Kenya National Bureau of Statistics (KNBS) released in April, SMEs have become the only go-to investment option for millions of Kenyans.

There is no doubt that SMEs form the backbone of Kenya’s economy, accounting for a substantial share of employment and output. They are essential drivers of job creation, providing livelihoods for millions of Kenyans and fostering economic inclusivity.

While SMEs in Kenya have enormous potential, they often face numerous challenges that hinder their growth and survival. Access to finance is a primary obstacle faced by many small businesses across the country. However, banks are now offering up to 10 million in unsecured loans for businesses.

Financial institutions such as Stanbic Bank Kenya Banks play a pivotal role in supporting the growth of SMEs. They possess the financial resources, expertise, and infrastructure necessary to provide much-needed capital and advisory services. Through the support of SMEs, Stanbic has been fostering economic resilience, stimulating employment, and driving sustainable development within and without the sector.

The bank has a unique solution called SME Bizna Loan designed with the needs of small businesses in mind to supply them with a short-term financing facility for their working capital needs. The product offers a maximum loan amount of 3 million shillings, top-ups after 6 months of satisfactory repayments, and credit life and fire burglary insurance.

Stanbic also has an overdraft facility for businesses, where SMEs are also included. An overdraft is a financial instrument that provides an extension of credit when the current account balance reaches zero. This solution is offered to businesses that seek to finance working capital gaps in instances of shortfalls. It is a working capital that will allow customers to manage their financial obligations.

SMEs are in need of tailored financing solutions and advisory support that continuously propels the scalability of individual businesses by pushing them to greater heights.

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