Kenya has fast-tracked the establishment of a fund to help small and medium-sized enterprises (SMEs) access seed capital and spur their growth, a government official said on Wednesday.
Francis Owino, principal secretary in the State Department of Industrialization, said the government is finalizing modalities of setting up a national fund that will address financing bottlenecks that hinder the growth of local start-ups.
“We have already drafted regulations to guide the operationalization of the small and medium-sized enterprises fund in the first quarter of 2020. The fund, once it is set up is expected to boost the growth of small businesses in the country,” said Owino.
He spoke in Nairobi during a meeting to review the SMEs’ policy that will provide a new roadmap to accelerate their growth through access to capital, markets, skilled labor, technology and innovations.
Owino said that vulnerable demographics like women, youth and people living with disabilities will benefit from State funding to help set up profitable business ventures.
“The start-ups operated by women and youth that meet funding criteria will benefit from new capital injection to boost their growth, prolong their lifespan and spread their operations beyond the Kenyan borders,” said Owino.
He said that Kenya has adopted international best practices to establish a friendly policy and regulatory environment amid the quest to boost the growth of small and medium-sized enterprises.
Government statistics indicate that SMEs contribute nearly 20 percent to Kenya’s gross domestic product and account for 70 percent of new jobs generated in the local economy.
Phyllis Wakiaga, chief executive officer of Kenya Association of Manufacturers, said that the operationalization of a state-run SME fund will be a game-changer in efforts to boost their competitiveness in the local and regional markets.
“Financing of local start-ups should be accompanied by regulatory incentives, tax breaks, skills development and adoption of technology to boost the quality of their products,” said Wakiaga.
She said that Kenyan start-ups stand to gain from the creation of African Continental Free Trade Area if they improve the quality of their products through value addition.