The government has launched 10 billion shillings credit guarantee scheme to mitigate the impact of COVID-19 on Micro, Small and Medium Enterprises (MSMEs).
Ukur Yatani, cabinet secretary of the National Treasury and Planning, told journalists in Nairobi that the COVID-19 pandemic has disproportionately impacted MSME businesses and lending institutions.
“With reduced turnover and disruptions in the market and supply chains, many MSMEs were, and still are, unlikely to attract affordable and quality credit under the traditional arrangements. Interventions are therefore necessary to cushion the impact of COVID-19 on MSMEs,” Yatani said.
He added that the government has considered and approved a total of 90 million dollars to be released over the current and next financial year for onward lending to small firms.
He noted that commercial banks participating in the credit guarantee scheme will be compensated in the event that small firms are unable to repay the loans.
The National Treasury said that Kenya is keen to enhance access to affordable credit by MSMEs because of the critical role they play in the country’s economic development and employment creation.
Government data indicates that there are over 7.4 million MSMEs in the country, which employ approximately 14.9 million Kenyans in various sectors of the economy and contribute approximately 40 percent of the economy.
Yatani revealed that small firms cover a wide range of activities in almost all sectors of the economy and thus are a major engine of inclusive economic growth and development.
– SOURCE XINHUA