Kenya literally thrives on the wheels of Small Medium Enterprises (SMEs). The SME sector employs 86 percent of the population and contributes about 45 percent of Kenya’s gross domestic product.
News that at least 1,000 SMEs are closing shop daily in Kenya is not something to stomach. With thousands of SMEs fading away, the real business nerve center is shifting and every sector will feel it.
SMEs are instrumental in making sure that there is a complete chain in financial inclusion by enabling circulation and taking services closer to the consumer.
The truth is, it is not easy for a Kenyan SME to get funding from Kenyan commercial banks. After the implementation of the Interest Capping law, most banks refrained from lending to SMEs who were considered risky.
Despite the notion that banks are no longer helping out the SMEs, there are three Kenyan banks that have stood out with various products and activities tailored towards the SME:
Gulf African Bank with Annisaa Biashara
In 2012, Gulf African Bank launched a suite of products reserved for women. Annisaa Biashara Financing is Sharia compliant and as such does not have ledger fees or interest rates.
The initiative has since morphed into a dedicated arm of the bank with the first women-only bank branches in East Africa personalized to the needs of women entrepreneurs.
Annisaa recently introduced a comprehensive insurance feature to enhance the product offering. Gulf African is just one of the many banking institutions that have structured products and services aimed at lowering the barriers to finance faced by underserved market segments.
Citi Banks on Smart Dukas
More than 1,000 kiosk owners received business and financial management assistance through a program supported by Citibank, TechnoServe, Moody’s Foundation, MasterCard Center for Inclusive Growth and Elea Foundation.
The partners have come together to equip the business owners with necessary skills such as merchandising, financial planning and supplier management.
In addition, the partners are exploring ways to further support the micro-entrepreneurs through digital payments and technology-enabled inventory management and customer relationship management.
KCB Group on 2JIAJIRI
KCB Group launched an ambitious 50 billion shilling enterprise development program geared towards birthing a new cadre of youthful entrepreneurs within the informal sector to ease the country’s unemployment crisis.
The program dubbed “2JIAJIRI” is expected to benefit at least 500,000 entrepreneurs in five years, thereby creating job opportunities for millions of Kenyans.
The main program objective is to provide the beneficiaries with vocational and enterprise development skills necessary to drive employment and wealth creation in selected sectors such as agricultural enterprise, automotive engineering, construction, beauty, and domestic services.
The program targets both existing (70 percent) and potential entrepreneurs (30 percent) (SME)