Members of the Kenya Bankers Association (KBA) have committed Ksh450 billion towards supporting Micro, Small, and Medium-sized enterprises (MSMEs) over the next three years as part of the banking sector’s commitment to support access more affordable credit to boost growth and development.
Speaking during the opening of KBA’s 2024 MSME Summit and the release of the Banking Industry Total Tax Contribution Report 2023, KBA Chairman, Mr John Gachora, who is also the NCBA Bank Group Managing Director, said supporting MSME growth is vital not only for economic development but also for poverty reduction through innovative business solutions.
Mr Gachora reiterated the industry’s commitment to enabling MSMEs to formalise, access credit, and contribute to economic growth and job creation. “As an industry, we acknowledge that MSMEs play a crucial role in our economy, contributing about a third to Kenya’s GDP and providing 8 to 9 of every 10 job opportunities in the country,” Gachora said.
Kenya’s President William Ruto lauded the banking sector for committing to double its financial commitment to MSMEs, adding that the government would lend its support to the sector through policy and institutional backing.
> Tech Investment Yields Huge Returns in a Digital Economy
“I commend the banking industry’s pledge to double lending to MSMEs by providing Ksh150 billion in new loans annually, beginning 2025. Accordingly, the government will support this bold and innovative move through policy and institutional support, including measures to guarantee the prompt payment of all pending government bills, which will commence once the ongoing verification process is completed,” said the president.
Dr Ruto lauded the banking sector for its collective tax contribution of KES 825 Billion to the economy over the last five years (2018-2023), describing it as the backbone of Kenya’s economic growth and development agenda. “The banking industry’s tax contribution in the 2023 financial year alone stood at a record Ksh 190.26 billion, a clear demonstration of the sector’s commitment to supporting our national development goals,” President Ruto said.
The President called for collaborative efforts between banks and the public sector to enhance financing to the manufacturing sector to spur investments and growth. “I commend the banking sector for this bold initiative, which will undoubtedly unlock the potential of our MSMEs and propel them to greater heights,” he said. “By formalising their operations and accessing credit, these enterprises will not only contribute to economic growth but also create much-needed employment opportunities for our youth.”
National Treasury and Economic Planning Cabinet Secretary, Mr John Mbadi, emphasized the importance of a predictable tax environment to foster continued growth and investment in the banking sector. “The implementation of a national tax policy and clear tax laws will reduce litigation between taxpayers and revenue authorities, creating a more conducive environment for businesses to thrive,” Mr Mbadi said.
He further commended the banking industry’s efforts in supporting MSMEs through initiatives such as KBA’s Inuka Enterprise Programme, which has trained businesses across the country, increasing their creditworthiness, operational efficiency, and resilience.
> Why Money Market Funds Interest Rates are Falling in Kenya
The 2024 Inua Biashara MSME Exhibition, themed “Accelerating MSME Development for Sustainable Economic Growth,” was geared towards empowering MSMEs and enhancing their access to tailored financial solutions. The event aimed to strengthen engagement between MSMEs and the banking sector, promoting growth, innovation, and long-term sustainability.
During the forum, the banking industry launched the MSME Accelerator Programme, which will provide mentorship, targeted financial literacy training, and market access interventions to help MSMEs scale their operations in collaboration with partners.
Good news for MSMEs, that is if politicians won’t loot everything.