Kenya Credit Guarantee Company to Boost Lending for MSMEs

Treasury CS Prof Njuguna Ndung'u, Co-operatives and MSMEs CS Simon Kiprono Chelugui, and PS Chris Kiptoo today met with a task force working to establish the Kenya Credit Guarantee Company, a new state corporation that aims to increase access to credit for Kenya's millions of micro, small and medium enterprises (MSMEs).

The MSME sector plays a vital role in Kenya's economy, contributing around 34% of the nation's GDP and providing employment for approximately 15 million Kenyans. However, the small businesses face major challenges in obtaining financing from banks and other lenders.

"The financing gap for MSMEs is staggeringly large," said Prof. Njuguna Ndung'u, Cabinet Secretary for the Treasury and Economic Planning. "Banks are currently only lending 783 billion shillings out of a potential trillion shillings in demand."

Kenya Credit Guarantee Company - Boosting Credit Access for MSMEs

Once operational, the Kenya Credit Guarantee Company will provide credit guarantees to lenders, helping to mitigate the risks involved in lending to MSMEs. This is expected to encourage banks and other financial institutions to increase lending to this vital sector of the economy.

"The majority of businesses in Kenya are small enterprises," noted Simon Kiprono Chelugui, Cabinet Secretary for Cooperatives and MSMEs. "Improving their access to credit is crucial for creating jobs and driving economic growth nationwide."