Kenya Private Sector Alliance (KEPSA) and the Mastercard Foundation have launched a Ksh 600 million fund that will extend interest-free loans to 400 Micro, Small, and Medium Enterprises (MSMEs) affected by the coronavirus outbreak.
The loan facility will be repayable by up to six months. Loans will range in size with an expected average size of Ksh 1 million.
The fund is created through support from the Mastercard Foundation COVID-19 Recovery and Resilience Programme.
It is targeting businesses that find it difficult to access financing from formal lending institutions such as banks and micro-financers.
Priority will be given to businesses run by women and young people.
MSMEs are defined by employment size: Micro-enterprises have less than 10 employees; Small enterprises 10 to 49 employees; and Medium-sized enterprises between 50 and 99 employees.
“These are bad times for everybody and a situation like this hits MSMEs the hardest. They already operate in a difficult environment, and research has shown that most MSMEs last two years, and you can see how such a situation would pan out for them,” KEPSA’s CEO, Carole Karuga said,
She explained the fund and the accompanying program is intended to strengthen the MSMEs’ capacity, and KEPSA would provide technical support, such as helping the businesses adopt digital solutions.
In addition to screening the MSMEs, KEPSA will roll out a virtual SME Hub and create a business recovery hub to support the SMEs by offering business development services.
Mastercard Foundation Regional Head, Eastern and Southern Africa, Daniel Hailu said, “MSMEs are the backbone of the economy and they need support now more than ever. Through the Mastercard Foundation COVID-19 Recovery and Resilience Program, we are working with our partners to deliver tailored support to MSMEs that will sustain their activities and continue to provide opportunities for dignified work.”
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