Any time soon, Kenyan startups will begin to access funds set up for them by the country’s government. According to Principal Secretary Kenya’s Department for Industrialization, Francis Owino, government is at an advanced stage of setting up a fund for Micro, Small and Medium Enterprises, as the new policy for the sector takes shape.
“The government has agreed to set up an SME fund. We already have the draft regulations to operationalise these funds. From next week, the regulations will be subjected to public participation to see how SMEs will be accessing these funds,” Owino said.
Here Is All You Need To Know
- The new SME fund is meant to address capital deficit and credit access to small businesses which have suffered in the last four years when the cap on interest rates was in place. The law was repealed in November last year.
- Owino however declined to reveal the amount.
- To further boots growth of small businesses, the government has also announced it is setting up ‘Biashara Centres’ in all the regions across the country.
- These centres will act as one-stop-shops in providing services to SMEs in a new push to ease doing business. The centres will be in place by June, the PS said.
- The latest developments come as the government and private sector push for a review of regulations guiding small businesses in the country.
- The MSME Policy underwent public deliberations last week, with sittings in all counties.
- According to Owino, the government recognizes the important role the sector plays as a major contributor to both GDP and employment.
- The sector accounts for more than 90 per cent of all businesses in Kenya and creates around 75 per cent of the jobs, including providing employment for vulnerable groups such as women, young entrepreneurs and poor communities.
- The government is counting on MSMEs to help meet the 500,000 annual job creation target.
- However, the sector faces numerous challenges according to industry players which includes limited access to financial services, inadequate access to skills and technology, poor access to markets and market information and limited access to infrastructure.
- Other challenges are unfavorable policy, legal and regulatory environments, inadequate business skills, limited linkages with large enterprises and unfavorable taxation regime among others.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com