Affordable loans will boast small businesses

Micro, small and medium enterprises (MSMEs) are increasingly becoming the primary drivers of job creation, innovation, production and overall economic growth, globally. In Kenya, MSMEs) constitute 98 per cent of all businesses, creating 30 per cent of all jobs and contributing 40 per cent of the country’s Gross Domestic Product (GDP). 

We in Nakuru County have bought into the growing narrative of the primacy of MSMEs in economic growth. We have, consequently, taken deliberate measures to support these business, including making them resilient to the dynamics of the global economy. 

We are alive to the fact that MSMEs require finance for expansion and increased productivity. Access to credit allows small businesses to invest in operations, expand into new markets and create jobs—a key factor in economic growth. It is for this reason that we have initiated the Wezesha Fund to solve the challenge of access to credit for our entrepreneurs.

County Enterprise Fund

Through the Sh100 million fund, comprising the Nakuru County Enterprise Fund (Sh50 million) and the Nakuru County Cooperative Revolving Fund (Sh50 million), we are convinced that our MSMEs and the cooperative sector will mobilise savings and capital, increase investments, enhance productivity, delve into value addition and create jobs for sustainable development of our people. We are in a sense giving financial legs to our boda bodas, transport Saccos and farmers, among other entrepreneurs, to stand up and walk the journey of enterprise development.

The County Enterprise Fund, which attracts an interest of 8 per cent per annum, is meant for groups who can access loans of between Sh50,000 and Sh200,000 while the Cooperative Revolving Development Fund targets cooperatives for loans ranging from Sh200,000 to Sh5 million at an interest of 6 per cent per annum.

These interest rates are comparatively lower, given that some banks are charging interests of up to 18 per cent on loans. Last week, we issued loans to groups amounting to Sh16.9 million and Sh21 million to cooperatives. Tens of other applications are undergoing appraisal by our partner, KCB Bank.

Digital and financial literacy

Critical to the survival of small businesses is entrepreneurship trainings, business coaching, and digital and financial literacy. KCB and Strathmore University will provide these. We are confident that this will also see the realisation of small business development centres in our county.

At the onset of my tenure, I established a structure to serve MSMEs even at ward levels. With such a structure, the issues and concerns of MSMEs are easily identified and addressed. Further, small businesses operated by the youth, women and people living with disabilities have a guaranteed share of county government businesses. 

We welcome donors, financial institutions, private sector actors to collaborate with us. The regulations for the two funds allow for grants, endowments, and co-financing. 

Ms Kihika is the governor of Nakuru County