MSMEs set for bumper financing in Sh8b KenInvest plan

An illustration of protected small savings. [Getty Images]

Kenya Investment Authority (KenInvest) targets to spend Sh120 million over the next five years to facilitate the growth of Micro, Small and Medium Enterprises (MSMEs).

In its latest strategic plan for 2023-2027, the State agency will link small businesses to financiers, develop and implement capacity-building activities, organise marketing events and support investments in climate-related ventures.

At least 500 SMEs will benefit from these programmes. KenInvest is the government agency tasked with the responsibility of not only marketing Kenya as the ideal investment market for both local and international enterprises but also facilitating those investors and businesses that seek to have a footing in the country.

The strategic plan recognises the role MSMEs have in the growth of the economy since they are included in President William Ruto's Bottom-up Economic Transformation Agenda (BETA), which also targets agriculture, housing and settlement, healthcare, digital superhighway and the creative economy.

KenInvest believes MSMEs and SMEs can help the country achieve the Sustainable Development Goal (SDG) 8 on decent work and economic growth.

To this end, KenInvest seeks to support SMEs and MSMEs over the next four years by establishing dedicated support mechanisms to facilitate their growth and development.

This will enable them to create a large number of decent and productive jobs.

"This will involve providing them with access to finance, training and capacity-building programmes, and technical assistance, thus enhancing their ability to attract investments and expand their operation," says KenInvest in the strategic plan.

The authority cites access to finance as one of the setbacks for the sector.

"Access to reliable financing options is essential for investors. Limited access to capital and high lending rates can hamper investment plans, particularly for small and medium-sized enterprises (SMEs)," the authority says.

"It is crucial to address this challenge and promote access to affordable financing to support investment initiatives."

Capacity support programmes

As a result, KenInvest looks to connect 500 SMEs to financial service providers during the five years.

It has proposed a Sh20 million budget to this end, with the money being released in trances of Sh5 million annually.

During the period, KenInvest will also spend Sh9 million to develop and implement MSME capacity support programmes. This will see KenInvest offer advisory services to the selected SMEs.

Additionally, KenInvest will provide linkages for enterprises to access support services and the necessary partners they need to grow. The agency has proposed a budget of Sh29 million for this purpose.

KenInvest also seeks to give SMEs and MSMEs international exposure through local and international events to match them with their overseas counterparts.

The agency has proposed a budget of Sh31 million for this.

Owing to Kenya's environmentally conscious ideation of investment propositions, KenInvest will support MSMEs to undertake climate investments and access climate financing.

Treasury's allocations

This will benefit 100 every year with a proposed budget of Sh31 million.

The total budget for implementing the strategic plan is Sh7.9 billion.

However, the authority estimates a deficit of Sh6.2 billion, going by the National Treasury's allocations for the last three financial years.

The previous strategic plan, 2018-2022, had a total budget of Sh6 billion.

"KenInvest is committed to evaluating and executing resource mobilisation strategies aimed at achieving financial sustainability. The authority will raise funds from both internal and external sources. Internal revenue source will be proceeds from the sale of obsolete and unserviceable assets," says KenInvest.

"The Authority will also explore opportunities for development partners' support in some of its initiatives."

It maintains that it will strive to optimally allocate resources to ensure the achievement of goals and objectives as envisioned in the strategic plan.

"The overall expenditure incurred shall be within the approved budget, statutes and guidelines issued by The National Treasury and Economic Planning and other government Ministries Departments and Agencies," says KenInvest in the plan.

To ensure optimum resource management, the authority will deploy its financial resources in conformity with the Public Finance Management Act, 2012 and Public Procurement and Assets Disposal Act, 2015.

"The authority will also enhance cost control measures to ensure efficient utilisation of allocated resources while eliminating wastage," says KenInvest.