Access to affordable finance for MSMEs

The Kenya Kwanza government promised to commit Kshs 50 billion a year to provide Micro, Small & Medium Enterprises with 100 per cent access to affordable finance through SACCOs, venture capital, equity funds and long-term debt for start-ups and growth-oriented SMEs.

• On 29th November 2022, Parliament adopted the motion to entrench the Hustler Fund through the Public Finance Management (Financial Inclusion) Fund Regulations, 2022. The government launched the fund as a flagship initiative to offer affordable credit to MSMEs and individuals. 
• In March 2024, the government launched the Supporting Access to Finance and Enterprise Recovery (SAFER) Project, which seeks to increase access to financial services for MSMEs. The government also reports that over KES 65 billion was disbursed through the Personal, Group, and Bridge Loan products in the fund to over 25 million Kenyans across the country, 67% being youth.
• However, concerns have been raised over poorly tailored loan products, unrealistic repayment periods, exclusionary delivery channels and misunderstood and misused savings component of the fund. Further concerns have been raised over the loan sizes ranging from Ksh 500 to 1000, which are too small to start or grow businesses. This has been seen as a mismatch for MSMEs’ financial needs.