The Star (Kenya)
Cabinet approves credit guarantee scheme for MSMES
The Cabinet has approved the establishment of a credit guarantee scheme for micro, small and medium enterprises.
The scheme is part of government’s interventions to cushion MSMES from the effects of the Covid-19 pandemic.
The decision was arrived at in a meeting chaired by President Uhuru Kenyatta on Thursday.
The government aims to enhance access to credit by mid-october for the financially constrained small businesses.
The pandemic has taken a toll on businesses, lowering the GDP and worsening unemployment. It is estimated at least 1.7 million have lost jobs during this period.
The Central Bank of Kenya in May warned that at least 75 per cent of SMES risk closure for lack of funds.
The scheme will commence with an initial seed capital of Sh10 billion to be released in two tranches of Sh5 billion in 2020-21 and 2021-22.