Kenya disburses US$40.35 million to boost small enterprises

Kenya said on Wednesday that the state-owned Credit Guarantee Scheme (CGS) that is managed by the National Treasury has disbursed 5.75 billion Kenyan shillings (about 40.35 million U.S. dollars) to 3,846 micro, small and medium-sized enterprises (MSMEs) since inception in December 2020 to June 30, 2023.

Cabinet Secretary of National Treasury and Economic Planning Njuguna Ndung’u said in Nairobi, the capital of Kenya, that the financial facility provides a de-risking product to enable banks to lend to small enterprises that would otherwise be not able to access credit.

“Seven banks are participating in the initial phase, and efforts are underway to further revamp the scheme so that it can achieve a greater and sustainable impact in the economy,” Ndung’u said in a speech read on his behalf by Dennis Olila, policy analyst, directorate of budget, fiscal and economic affairs at the Treasury.

According to government data, Kenya has approximately 7.4 million MSMEs which contribute about 34 percent of the gross domestic product.

Ndung’u said the credit guarantee scheme is geared toward enabling small entrepreneurs to obtain financing for their business operations, expansion as well as innovation.

He revealed that MSMEs typically face unfavorable loan conditions such as short payback periods and high-interest rates because they are viewed as having a high default risk. Enditem