The Rush For KEPSA’s Unsecured SME COVID-19 Recovery Loans

Over 200 local businesses in Kenya have applied for COVID-19 relief loans under a programme run by Kenya Private Sector Alliance (KEPSA) and Mastercard Foundation. The first set of beneficiaries have received the loans and several more are under review, pending disbursement of funds.

 The Mastercard Foundation COVID-19 Recovery and Resilience Program for Micro, Small and Medium Enterprises (MSMEs) aims to benefit 400 MSMEs through the partnership with KEPSA, whose operations have been adversely affected by the COVID-19 pandemic.

 The beneficiaries, who include women- and youth-owned enterprises, receive interest-free loans ranging between Ksh100,000 to Ksh1.5 million without any collateral, and payable within six months. The business must be a KEPSA member either directly or through a member association, and must have been in existence for at least six months to be considered eligible to apply.

 “We are working to spur economic recovery with a focus on small businesses, and these loans can be used to restart and rebuild businesses as the pandemic-related restrictions continue to be lifted and recovery begins,” KEPSA Chief Executive Officer Ms. Karuga said in a statement on Thursday, adding “We anticipate to see more businesses receive funds in due course.”

 The Mastercard Foundation COVID-19 Recovery and Resilience Program aims to assist local businesses to weather and respond to the negative effects of the COVID-19 pandemic, while strengthening their resilience in the long- run.

Besides providing loans, the program also enables MSMEs to share knowledge between them, and provides coaching to businesses on how to navigate the prevailing market disruptions.

 The programme was launched in June this year and the loan application period is expected to be closed by the end of January 2021.

While the majority of the businesses applying for the loans are based in Nairobi County, applications have been received from 17 counties across the country.

Among those that have already received loans are businesses in real estate, insurance, retail, and education sectors, which are some of the most hard-hit sectors by the pandemic.

Majority are women-owned businesses, with the average age of the applicants being more than 35 years.

A KEPSA survey in October showed that 64% of the MSMEs surveyed had experienced high or very high negative impact on their businesses from COVID-19, which included loss of customers, liquidity challenges, high cost of operations, inability to pay salaries, and reduced labour productivity.

 “We are encouraging more business owners to apply for this facility to boost their businesses, as they are the lifeblood of our local economy,” says Lilian Mramba, Grassroots Business Funds (GBF) Regional Director for Africa, adding, “The uptake is encouraging as we have received applications from 17 counties across the country. We expect more applications from January as most businesses are gearing to resume.”

 GBF, a global impact investment organisation, is the facility’s fund manager. The application process is online through a portal run by KEPSA.

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