The government wants to increase the credit Guarantee scheme capital for SMEs from the current Sh4 billion to Sh10 billion over the medium term.
Cs Ukur Yattani says the government will seek support of development partners to enhance coverage of the scheme which offers credit for small traders.
While presenting the Sh3.3 trillion budget in Parliament on Thursday, Yatani said total loans extended to SMEs since the launch of the credit Guarantee scheme in December 2020, surpassed Sh2.2 billion by December 2021.
"This has expanded access to affordable credit to Micro, Small and Medium Enterprises to 45 counties across 11 different sectors of the economy," Yatani said.
Yattani said the coming financial year 2022/2023 will focus on supporting economic recovery and the Big 4 agenda to ensure well being of Kenyans.
He allocated Sh10.1 billion shillings to support local industries and their ongoing projects in the manufacturing sector.
Out of this, Sh1 billion will go to the credit Guarantee scheme to enhance access to affordable credit by SMEs in the Manufacturing industry.
Sh626 million will go to the provision of finances to SMEs through Kenyan Industrial Estate.
The CS said 5.1 million jobs, cumulatively, were created in formal and informal sectors since 2013.
Meanwhile, Yatani has proposed an amendment to the Income Tax Act to exclude microfinance institutions licensed under the Microfinance Act from the interest restrictions based on a ratio of earnings before interest, taxes, depreciation and amortization in determination of their taxable income.
Last year, the Income Tax Act was amended to replace the previous thin capitalization rule for determining taxable income with a method that restricts interest based on a ratio of earnings before interest, taxes, depreciation and amortization.
In the amendment, microfinance institutions licensed under the Microfinance Act were omitted in the exclusion list of the application of the new rule.
