Government unveils new financing plan to boost MSMEs

PS Susan Mang'eni speaking during the KDC Customer Networking Forum in Nairobi./HANDOUT

The government is stepping up efforts to unlock financing for micro, small and medium enterprises (MSMEs) by expanding access to affordable credit and introducing tailored financial products aimed at different categories of entrepreneurs.

Speaking during the Kenya Development Corporation (KDC) Customer Networking Forum in Nairobi, Principal Secretary for Micro, Small and Medium Enterprises Development Susan Mang'eni said addressing the financing gap remains a top government priority as it seeks to stimulate business growth and job creation.

She noted that Kenya has enormous entrepreneurial potential, particularly among young people and emerging businesses, but limited access to affordable capital continues to hinder growth.

According to the PS, many MSMEs struggle under the weight of expensive loans and inadequate financing, forcing many businesses to collapse in their early stages.

She called for increased funding for Development Finance Institutions (DFIs) by both the government and development partners to meet the growing financing needs of enterprises while also exploring sustainable ways of unlocking public-sector financing.

PS Susan Mang'eni with other dignitaries during KDC Customer Networking Forum in Nairobi./HANDOUT

PS Mang'eni revealed that the government is considering a tiered financing model that would tailor financial products to the specific needs of different groups, including fresh graduates, young entrepreneurs, persons with disabilities and women.

She said the approach would ensure financing solutions are better aligned with the unique needs of each category of borrower.

At the same time, the government wants businesses that have benefited from DFI financing over an extended period to transition to commercial banks, creating room for newer enterprises to access concessional funding.

The PS observed that some businesses continue to rely on development finance long after they have matured, clogging the system and limiting opportunities for other deserving entrepreneurs.

KDC Director General Norah Ratemo said the corporation is also reviewing its collateral valuation model by shifting from the traditional forced-sale valuation to market value. She said the move is expected to make financing more accessible by allowing borrowers to unlock greater value from their assets.

Held under the theme, "Building Synergies for Sustainable Growth," the KDC Customer Networking Forum brought together customers, government officials and development partners to network, share experiences and explore opportunities in financing, export markets, capital markets and strategic partnerships.

The forum also highlighted success stories of KDC-supported enterprises that are creating jobs, driving industrialisation and transforming communities across the country.

Organisers said the event marked the beginning of a continuous customer engagement platform aimed at strengthening collaboration among KDC, the government and development partners while helping businesses access financing, markets, business advisory services and strategic partnerships that support sustainable socio-economic development.