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CBK Governor Dr. Patrick Njoroge/CFM

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CBK in support of Treasury’s Sh100bn SME Credit Guarantee

NAIROBI, Kenya, Apr 30- The Central Bank of Kenya has encouraged the National Treasury to go ahead and create a funding kitty with monies close to Sh100 billion to cushion distressed Micro,Small and Medium Enterprises against the coronavirus effects.  

Speaking during a post-Monetary Policy Committee briefing, the Central bank of Kenya governor Patrick Njoroge said that the credit guarantee scheme, a project of Treasury, is currently a work in progress and will ensure that loan rates remain affordable to MSMEs.

“ We do need to have a framework where the SME’s can borrow and minimize the risk to the lender so we are thinking of a fund someone in the order of Sh100 billion so this is something we need to work out, give us sometime give us some space we will let you know,” said Njoroge.

However, the governor highlighted that there was a need to come up with innovative measures to support the sector as financing is not a solution enough with the players currently witnessing collapsed demands.   

“At this moment the biggest concern for SME’s is not so much finance right now they need orders, because even if you give them money what will they do with it if in a sense there are no orders coming to them,” he added.

According to the bank regulator, the lenders have already restructured loans amounting to Sh9.9 billion between March 18 and March 30, on customer requests.

During the online briefing, the governor warned customers against waiting for a general rule that covers all depositors and that the request to waive loans for borrowers is being handled on a case by case basis.

“ I assume some are waiting sort of for a blanket statement and adjustment, it won’t work like that, you have to present yourself to your bank and explain how you were affected by the pandemic,” he added.

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