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Coronavirus

SME’s affected by COVID-19 to receive Sh5bn stimulus package from the government

NAIROBI, Kenya, Jul 20-Small and Medium Enterprises paying for the effects of coronavirus pandemic are set to receive Sh5 billion stimulus package from the government.

Trade Chief Administration Secretary Lawrence Karanja tweeted that those making Personal Protective Equipment will be given priority at a time when demand continues to rise owing to the increased cases of the coronavirus disease.

“Small and Medium Enterprises (SMEs) affected by COVID-19 are to benefit from a Sh5 billion stimulus package from the government. Small businesses manufacturing PPEs will be prioritized,” said Karanja.

The funding comes at a time when a report by the Kenya Association of Manufacturers and auditing firm KPMG revealed that 37 percent of SMEs scaled-down their production since the first case of COVID-19 was reported in Kenya.

During the 2020/2021 budget presentation by Treasury Cabinet Secretary Ukur Yatani the government allocated Sh3 billion seed capital to operationalize the SME Credit Guarantee Scheme, more than a year after it was formed.

While presenting Kenya’s Sh2.79 trillion budget for the financial year 2020/2021, Treasury Cabinet Secretary Ukur Yatani said the scheme will enable the provision of affordable credit to small and medium enterprises in an efficient and structured manner.

“Despite their important contribution, this sector has continued to face challenges of accessing credit, due to lack of enough collateral, high cost of credit and informal business structure. These challenges have been worsened by the Covid-19 Pandemic,” Yatani said.

In May, Central Bank of Kenya Governor Patrick Njoroge said the sector’s players do not have enough funds to keep up with their operations past June 2020.

Data by the Kenya Association of Manufacturers revealed that Kenya has close to 7.41 million SMEs with only 1.56 million being licensed.

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