This archive report was first published on 6 October 2019.
Published on October 6, 2019, a new report has revealed that a third of small and medium-sized enterprises (SMEs) in Kenya that needed funding failed to secure loans.
The SME Competitiveness Survey, conducted in partnership between the Kenya National Chamber of Commerce and Industry (KNCCI), the Ministry of Industry, Trade and Cooperatives, and the International Trade Centre, found that 33 per cent of small businesses indicated that their applications were either rejected or they opted not to apply due to high interest rates, collateral requirements, and complex application procedures.
“Commercial banks in Kenya already derive a substantial portion of their portfolio and revenues from SMEs and SME-focused financial products, so new approaches are needed to broaden and deepen financial inclusion among smaller Kenyan companies,” noted the report.
According to the survey, 45 per cent of respondents had applied for a loan, with 84 per cent securing a loan and 5 per cent having an application in progress. A total of 118 respondents, or 13 per cent of the surveyed firms, identified high interest rates as their biggest financial challenge.
KNCCI President Richard Ngatia said, “We are establishing an SME development fund to support the growth of small businesses through credit facilities.” The chamber has secured funding in excess of Sh250 million from various partners, including Financial Sector Deepening (FSD Kenya), Swedish International Development Cooperation Agency (SIDA), European Union (EU), and Alliance for a Green Revolution in Africa (AGRA).
