Micro Small & Medium Enterprises (MSMEs) have been key contributors to Kenya’s GDP in terms of wealth creation and employment opportunities. MSMEs account for a majority of Kenya’s private sector, with a good number running businesses cutting across different industries in the economy.
Co-operative bank has secured USD 150 million (Kshs 15.2 billion) to provide financing as well as business training for small and medium enterprises in Kenya.
Co-operative Bank has already started engagement forums (MSME) spread out in the 47 counties. The first of its engagement sessions was held in Nakuru County, training and equipping businesses with the skills and strategies to grow their ventures in Kenya’s credit-constrained environment.
The thinking behind the engagement forums is to streamline most of their ventures into business models that appeal to the eyes of formal financial institutions. In so doing the lender seeks to boost its MSME loan book by providing them with access to finance and improving the confidence of other potential lenders in offering financial support to MSMEs.
“We have made available the Sh15.2 billion kitty for a package of loans that include an unsecured business loan, an e-credit through our MCo-opCash App where businesses are able to borrow up to Sh2 million via their mobile phone. The MSME offer will also be packaged with insurance and supported by trade services such as letters of credit, guarantees and supply chain financing,” said Co-operative Bank head of business banking Moses Gitau.
There is need for business people to know how the industry works, have a hands-on approach to their business and understand government regulations.