FINANCING MSMES

MIANO: Take full advantage of KDC funds

In Summary
  • By equipping entrepreneurs with the necessary tools and knowledge, these initiatives lay the perfect groundwork for long-term prosperity and growth.
  • The combined potency of Drive and Safer makes for a powerful duo poised to drive palpable transformation in Kenya’s pastoral economy.

Recently, a joint initiative involving the Kenya Development Corporation and the Agricultural Finance Corporation received Sh600 million World Bank funding for two crucial projects.

These are the De-Risking, Inclusion and Value Enhancement of Pastoral Economies (Drive) and the Supporting Access to Finance and Enterprise Recovery (Safer) projects.

The broad rationale behind mounting these two projects was to boost the economic resilience of Kenyans and foster inclusive growth. This move was especially critical in the wake of unforeseen eventualities visited upon Kenyans by Covid-19 and extreme weather events such as drought and floods experienced across the country in recent times.

By equipping entrepreneurs with the necessary tools and knowledge, these initiatives lay the perfect groundwork for long-term prosperity and growth.

Both Drive and Safer offer a much-needed bypass that spares their target beneficiaries the stumbling blocks imposed by the beadwork of inflexible borrowing strictures associated with commercial lenders.

It is worth noting that the institutions entrusted with channelling funds to MSMEs are availing finances that range between Sh10 million to Sh500 million, with repayment terms of 60 to 120 months. Those institutions include savings & credit cooperatives, microfinance banks and tier-three commercial banks. To spice it all up, there is an accompanying moratorium of up to 12 months.

The cash boost recently disbursed to Drive and Safer is part of an ongoing effort designed to provide Kenyans with more accessible and affordable credit, with special focus being on areas designated as arid and semi-arid.

In particular, Drive aims at unlocking the vast potential of Kenya's pastoral economies, while Safer—a partnership of the National Treasury, the World Bank and KDC—focuses on boosting micro, small and medium enterprises.

Thus far, Drive and Safer have served as Siamese twins providing essential financial support and technical assistance to enterprises affected by post-pandemic downsides.

To date, Drive has attracted over Sh3 billion and disbursed upwards of Sh730 million. Through Drive, KDC has deployed innovative financial mechanisms that have substantially strengthened livestock value chains, thus empowering communities and driving inclusive growth.

So far, Drive has distinguished itself as a major prop to Kenya's pastoral economy. It has the capacity to unlock the huge yet largely unexplored potential of our pastoral communities and unleash the abundant opportunities our arid and semi-arid lands herald.

The combined potency of Drive and Safer makes for a powerful duo poised to drive palpable transformation in Kenya’s pastoral economy. The joint effort by KDC, AFC, World Bank, the State Department for Livestock and ZEP-RE has laid a formidable partnership set to deliver sustainable development of pastoral communities across Kenya and MSMEs.

From a closer look, the impact of Drive and Safer extends far beyond the mere provision of funds. Rather, these two are catalysts for change and drivers of growth designed to leave no one behind through empowering communities while fostering economic resilience in some of the most marginalised regions of Kenya. The payback from Drive and Safer will certainly dignify whole communities and usher many into the modern economy orbit.

The government, on its part, is committed to extending unwavering support to the revitalisation of agriculture and MSMEs sectors to pave the way for livestock producers, pastoralists, farmers and MSMEs to thrive and optimise their returns.

Through collaboration with the private sector, the government is keen on facilitating value addition programmes, enhancing post-harvest management, bolstering resilience and establishing sustainable market systems.

With the private sector supporting pastoralists and MSMEs in commercialising their ventures, the vast potential yet to be realised by the agricultural sector will finally become a reality.

Time to notify as many would-be beneficiaries of Drive and Safer to use them to good advantage is surely nigh.

Ministry of Investment, Trade and Industry Cabinet Secretary

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