The government has announced a new strategy aimed at improving access to financing for micro, small and medium enterprises (MSMEs) by expanding affordable credit and developing financial products tailored to the diverse needs of entrepreneurs.
Speaking at the Kenya Development Corporation (KDC) Customer Networking Forum in Nairobi, Principal Secretary for Micro, Small and Medium Enterprises Development Susan Mang’eni said bridging the financing gap remains a key government priority as it works to stimulate enterprise growth and create more employment opportunities.
Mang’eni said Kenya has a strong entrepreneurial culture, particularly among young people and start-up businesses, but many enterprises continue to face challenges accessing affordable capital needed to expand.
She noted that the high cost of borrowing and inadequate financing have forced many small businesses to shut down during their early stages of operation.
To address the challenge, the government is seeking increased funding for Development Finance Institutions (DFIs) from both the Exchequer and development partners, while also exploring sustainable ways of mobilising additional public sector financing.
According to the Principal Secretary, the goal is to ensure financing solutions are designed to meet the specific requirements of different categories of businesses rather than applying a one-size-fits-all approach.
The government also wants businesses that have relied on concessional funding from DFIs for long periods to graduate to commercial bank financing once they become financially stable. This, she said, would free up development finance for newer enterprises that require affordable capital to grow.
Mang’eni observed that some mature businesses continue to depend on development finance long after they are capable of accessing commercial credit, limiting opportunities for other deserving entrepreneurs.
Meanwhile, Kenya Development Corporation Director General Norah Ratemo announced that the institution is reviewing its collateral valuation framework by replacing the traditional forced-sale valuation model with market value assessments. The change is expected to enable borrowers to secure larger loans by unlocking the full value of their assets.
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Held under the theme Building Synergies for Sustainable Growth, the KDC Customer Networking Forum brought together government officials, business owners, customers and development partners to discuss financing opportunities, export markets, capital markets and strategic partnerships.
The event also showcased enterprises that have benefited from KDC financing, highlighting their contribution to job creation, industrial development and community transformation.
Organisers said the forum marks the start of an ongoing engagement platform designed to strengthen collaboration between KDC, government agencies and development partners while improving businesses’ access to finance, markets, advisory services and partnerships that promote long-term economic growth.
