Boost for Kiambu SMEs as county, KCB partner in Sh1.3bn kitty

The Kiambu Government has established a Sh1.3 billion revolving fund in partnership with KCB Bank to unlock the business potential of micro, small and medium enterprises (MSMEs) in the county.

The kitty dubbed Jiinue Fund will also see youth, women, people living with disabilities and other vulnerable groups in the county access low-interest loans and loan guarantees to grow their businesses and in the long run, improve their livelihoods.

KCB bank will advance Sh1.3 billion to individuals and start-ups which were hard-pressed by the effects of the Covid-19 pandemic while the Kiambu county government will act as the guarantor with Sh138 million as collateral.

The fund will see groups access loans of up to Sh300,000, start-up financing of up to Sh150,000 while existing MSMEs and saccos will get financing of up to Sh1 million.

Speaking while launching the kitty on Friday in Kiambu, Governor James Nyoro said the county contribution will help subsidise the interest rate from the bank so that borrowers can access funds at seven per cent instead of the average market rate of 13 per cent.

“This will bridge the long-standing hurdle of provision of collateral when in need of business financing,” Nyoro said.

This means the county government will guarantee six per cent while business owners will take up the balance (seven per cent). More than 5,000 Kiambu residents are expected to benefit from the financing deal.

“We initiated and launched this fund to match the entrepreneurial and innovative spirit of the people of Kiambu. If the level of creativity that we saw at our recently held Youth Innovation Week is anything to go by, we are looking at our next cohort of Kiambu billionaires in the coming years,” Nyoro said.

The county chief said while MSMEs contribute over 40 per cent of Kiambu’s Gross County Product and over 90 per cent of employment, they still face financing challenges thus denying them an opportunity to grow exponentially.

“This is why we are pioneering innovation in the public sector to take the risk out so that they can fully focus on business growth and income generation. This kitty brings an end to the financial stress that most of our MSMEs have been facing,” he said.

The governor said the fund targets existing MSMEs in Kiambu where entrepreneurs will be financed according to their ability to pay based on their cash flows.

“We will also develop policies and structures that support the utilisation and sustainability of the fund and also facilitate capacity building for entrepreneurs.”

KCB retail director Anastacia Kimutai said the interest sharing and guarantee model is one of the innovative ways the bank has developed through partnership with the Kiambu county government to facilitate credit to catalyse the business growth of the entrepreneurs and enable economic recovery.

“We appreciate the potential MSMEs have on the economic growth in the country and that is why the bank takes a keen interest to support the sector. We see this facility as a strong cushion for small businesses in the county, something that should be replicated across the country. We hope it will boost our economic recovery and provide capital and other resources to small businesses to help them weather the crisis. If MSMEs do well, the economy does well,” Kimutai said.

She said the facility is part of a raft of initiatives which KCB is running to support the revival of businesses affected by the effects of Covid-19.