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Principal Secretary for the State Department of Micro, Small, and Medium Enterprises (MSE) Development, Susan Mang’eni, has reaffirmed the government’s commitment to enhancing financial access for small businesses through the Kenya Credit Guarantee Scheme (KCGS).
Speaking at a high-level stakeholder engagement forum, Mang’eni emphasized the scheme’s critical role in empowering MSMEs, fostering economic resilience, and driving job creation across the country.
This forum has brought together stakeholders from the government, financial institutions, MSME sector representatives, and development partners to assess the progress of KCGS and explore strategies to expand financial inclusion through the Rural Kenya Financial Inclusion Facility (RK-FINFA).
Established to address the persistent challenge of limited access to affordable credit, KCGS has so far disbursed Kes 6.34 billion to 4,147 MSMEs in September 2024.
Inorder to enhance access to credit, mostly for enterprises in the rural agribusiness sector, the government is rolling out RK-FINFA, a facility aimed at extending financial inclusion to small businesses in rural areas.
By providing partial guarantees to financial institutions, the initiative seeks to de-risk lending to small enterprises, encouraging financial institutions to extend more credit to MSMEs.
Madam Mang’eni stated the government’s unwavering commitment to strengthening financial mechanisms for MSMEs.
“The Kenya Credit Guarantee Scheme is instrumental in unlocking access to credit for countless small businesses that would otherwise struggle to secure financing. As we review its implementation, our focus is on identifying ways to make it even more impactful to our MSMEs,” she said.
She also emphasized the need for collaboration with financial institutions and development partners to improve accessibility.
“We are keen on working with financial institutions and other partners to simplify processes, increase awareness, and ensure that the scheme reaches every corner of the country. MSMEs are at the heart of Kenya’s development agenda, and their success is our success,” she added.
The recommendations from the forum included enhancing capacity-building initiatives for MSMEs to improve their financial literacy, simplifying the credit application process, and increasing the budget allocation for the scheme to benefit more businesses.
Financial institutions were also urged to develop tailored products that cater to the unique needs of different categories of MSMEs.
Kenya Credit Guarantee Scheme is expected to play a pivotal role in driving economic growth, fostering entrepreneurship, and creating sustainable jobs, ensuring that small businesses remain the engine of Kenya’s economy.
The PS commended the National Treasury for the initiative observing that the enhanced Credit guarantee scheme will complement the Hustler Fund on a big away to deepen the financial inclusion at the bottom of the economic pyramid.
“The Hustler Fund has embarked on graduating borrowers who have demonstrated good borrowing behavior to higher loan Loan limits bridge product to enable them start gaining the banking experience that will eventually integrate them to the mainstream financing sector”
Since the launch in December last year, the Hustler Fund Bridge loan product has disbursed over Kshs. 1.4billion to over 160K bridge beneficiaries and the repayment very encouraging.
The Hustler Fund credit rating system will make it easier for the good Bridge product beneficiaries to be guaranteed through the Credit scheme and access higher financing for their businesses.