NAIROBI, Kenya, Dec 9-The National Treasury on December 8 2020 officiated the Small and Medium Enterprise Credit guarantee scheme to support small businesses in the country.
Treasury Cabinet Secretary Ukur Yatani said the program will mitigate the adverse impacts of the COVID-19 pandemic on business activities of the Micro, Small and Medium Enterprises (MSMEs).
” With reduced turnover and disruptions in the market and supply chains, many MSMEs were and are still unlike to attract affordable and quality credit under the traditional arrangement,” said Yatani.
“Interventions are therefore necessary to cushion the impact of COVID-19 on MSMEs,” he added.
The program is a partnership between the government and financial institutions who act as intermediaries in provision of finances to the MSME’s borrowers.
The National Treasury used an open and objective process to identify seven banks to implement the inaugural phase.
“We appreciate these banks for accepting to partner with the Government on this important arrangement,” reads Yatani’s statement.
The government intends to bring other banks and financial institutions on board including those commercial banks that have been serving the MSME sector but not in this initial phase.
This comes after President Uhuru Kenyatta in May unveiled the 8-Point Stimulus Package, where he directed an initial allocation of Sh3 billion as seed capital for the inaugural Credit Guarantee Scheme towards MSMEs.
According to Yatani, the Cabinet considered and approved a total of Sh10 billion to be availed over two financial years, 2020/21 and 2021/22 towards the credit guarantee scheme.
