KEPSA and the Mastercard Foundation launch fund to support MSMEs in Kenya hit by COVID-19

The Kenya Private Sector Alliance (KEPSA) and the Mastercard Foundation have launched a fund to provide loans to a maximum of 400 Micro, Small, and Medium Enterprises (MSMEs) whose businesses have been affected by the COVID-19 pandemic. The loan facility will be interest free and repayable by up to six months.

The Fund is created through support from the Mastercard Foundation COVID-19 Recovery and Resilience Program and is targeting businesses that find it difficult to access financing from formal lending institutions such as banks and micro-financers. Priority will be given to businesses run by women and young people.

KEPSA will carry out the screening of the Micro, Small, and Medium Enterprises to ensure they meet the criteria for eligibility to access the loans. Loans will range in size with an expected average size of Ksh 1 million.

KEPSA’s CEO, Carole Karuga said, “These are bad times for everybody and a situation like this hits MSMEs the hardest. They already operate in a difficult environment, and research has shown that most MSMEs last two years, and you can see how such a situation would pan out for them.”

She explained the fund and the accompanying program is intended to strengthen the MSMEs’ capacity, and KEPSA would provide technical support, such as helping the businesses adopt digital solutions. In addition to screening the MSMEs, KEPSA will roll out a virtual SME Hub and create a business recovery hub to support the SMEs by offering business development services.

“COVID-19 has affected my business negatively in terms of work consistency and revenue and as a result fewer working hours for my virtual employees. As a business that relies 90 percent on the outsourcing of transcription work, clients are cutting costs and my service offering is at the top of the list to be cut. Through business development services, the solution would be to remodel the business to offer skills that will be in demand now and beyond the pandemic,’’ said Frida Mwangi, Founder of KaziRemote Limited.