SME'S

Uhuru urges banks to offer affordable loans to SMEs

In Summary

• The President expressed optimism that the lending services launched will boost enterprises in the country.

President Uhuru Kenyatta has urged the banking institutions to consider giving cheap loans to Micro, Small and Medium enterprises(MSME's).
President Uhuru Kenyatta has urged the banking institutions to consider giving cheap loans to Micro, Small and Medium enterprises(MSME's).
Image: PSCU

President Uhuru Kenyatta has urged banking institutions to extend cheap loans to Micro, Small and Medium enterprises (MSMEs).

Uhuru said SME's have been locked out of the formal credit market for long, which has hampered their businesses.

He spoke on Wednesday at Safari Park Hotel, Nairobi, while launching Stawi, a new credit facility for MSMEs.

"It is better to find mechanisms and ways to lend to those young men and women who are interested in making something positive out of their lives, interested in employing their fellow young men and women, because if they are positively engaged, if they are part of our economic prosperity even your businesses are secure,” Uhuru said.

The President expressed optimism that the lending services launched will boost enterprises in the country.

Image: PSCU

Stawi will offer unsecured loans ranging from Sh30,000 to Sh250,000 at an interest rate of nine per cent.

"Stawi will offer a longer repayment period to small business borrowers, thus making it easier for them to better manage their cash flows and grow their businesses to the next level," Uhuru said.

Uhuru said that SMEs account for more than 80 per cent of all businesses in the country.

During the launch, Uhuru said that more than seven million SMEs are unlicensed which hinders them from access capital from the credit infrastructure as currently set up.

“We have over 7 million SMEs. Let us engage them and provide cheap loans for them to grow. If you say you can't offer them service because they are high-risk, what happens when their businesses collapse?” Uhuru said.

Image: PSCU

The President added that MSME's have the potential to contribute more than the current 30 per cent of the country’s GDP if fully supported.

It is better to find mechanisms and ways to lend to those young men and women who are interested in making something positive out of their lives, interested in employing their fellow young men and women, because if they are positively engaged, if they are part of our economic prosperity, even your businesses are secure,” the President said.

The Central Bank of Kenya has partnered with NCBA Bank, Co-operative Bank, Diamond Trust Bank and KCB to offer the scheme which is aimed at improving access to credit for MSMEs.