Five state agencies have partnered to spur growth among small business through funding and technical support.
IDB Capital, Industrial, Commercial Development Corporation, the Kenya Industrial Estate, the Micro, Small Enterprises Authority and the Kenya National Trading Corporation will drive President Uhuru Kenyatta's SME agenda.
On Jamhuri Day, the president spelt out plans to introduce Stawisha SME Mashinani, coupled with unspecified administrative measures to deal with the challenges facing the sector.
The state bodies will share information in order to contribute to growth of MSMEs at the grassroots level.
"In particular, the parties will exchange information on events/ contacts of their field staff and information of available product and services," the agreement stated.
Small businesses, especially in the informal sector have been a key contributor to Kenya's economy accounting for close to 30 per cent of the country's GDP.
Growth has however been stunted over the past three years due to poor credit access largely driven by the rate cap regime where banks categorised small business owners as risky borrowers.
Trade Ministry’s Chief Administrative Secretary Lawrence Karanja said the agencies will be tasked to credit SME projects which have been sidelined by lenders due to lack of security.
“We want to look at the small enterprises and see how we can promote them as the project focuses on implementing the big four agenda,” Karanja said.
The programme which has been established as a one-stop-shop has so far secured Sh4 billion in consolidated funds geared towards small business funding.
Through the Micro and Small Enterprise Authority, a small business owner will be able to access between Sh10,000-Sh200,000 worth of capital, while the Kenya Industrial Estate will offer Sh50,000 to Sh20 million in SME loans.
On the other hand, IDB Capital and Industrial and Commercial Development Corporation will lend between Sh5 million-Sh200 million and 50 million to Sh1 billion respectively.
IDB Capital managing director Karen Kandie said interest on loans will be dependent on the risk profile of the business owner.
“Some of the enterprises will have a grace period within which they do not have to pay principal and they only pay interest between two months to two years depending on how big the project is,” Kandie added.
The Kenya National Trading Corporation has offered to consolidate the project.
The initiative also aims to provide business advisory, asset financing, working capital, and grants to SMEs either at start-up, expansion or modernisation stages.