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The Nairobian

Boost for MSMEs as banks increase annual loans by Sh150 billion

Nairobi

By Okumu Modachi and Noel Nabiswa | Oct 16, 2024

**President William Ruto during the Banking Industry Inua Biashara Small And Medium Enterprise Exhibition at the Kenyatta International Convention Centre, Nairobi, on October 16, 2024**. [PCS]

Small and medium-sized enterprises received a major boost after banks pledged to inject Sh150 billion as new loans into the sector annually.

This emerged on Wednesday during opening of Kenya Bankers Association (KBA) Inua Biashara Exhibition at Kenyatta International Convention Centre, Nairobi that saw the launch of MSME Accelerator Programme.

While presiding over the launch, President William Ruto urged the National Treasury and Cooperatives and MSMEs Ministries to develop policies that will guide the sector ahead of release of the funds next year.

President Ruto said the funds will represent 100 per cent increase in the money the bankers lent to the sector last year.

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According to Central Bank, the banking industry provided Sh783 billion as loans in 2023 to the vital sector that contributes to about 80 per cent of the economy which represents an increase of approximately Sh75 billion.

"I urge the National Treasury and the Ministry of Cooperatives & MSME Development to align policies in order to provide a sustainable framework for engaging with opportunities for transformation and addressing the challenges MSMEs face in accessing credit," Ruto said.

The President noted that the inaugurated programme growth for the small businesses' provides avenues for comprehensive assessments, advanced training and tailored support from public and private sector partners, as well as development finance institutions.

He said the bankers policy aligns with the Bottom-Up Economic Transformation Agenda, outlining strategic interventions to elevate the sector.

The Head of State lauded the bankers, acknowledging their "essential role in ensuring the efficient functioning of our economy and maintaining the integrity of our financial sector but also for leading by example in tax compliance.

In 2023, the banking industry contributed Sh190 billion in taxes, according to Central Bank, an amount Ruto said reflects the performance and commitment of the financial institutions to grow the economy.

"Banking institutions have demonstrated their commitment to expanding lending to the MSME sector through a variety of dedicated products and solutions," he said.

Prime Cabinet Secretary Musalia Mudavadi called on stakeholders in the trade and investment industry to have "inclusive and agile finance system that targets those who are generally underserved particularly if we want to grow."

"As you call for that global approach, it is important to make sure that your home base your financial institutions are financially stable, agile and inclusive and pro-people in the models," said the Prime CS.

National Treasury CS John Mbadi committed to support initiatives that are pro economic growth and which will ensure sustainability of job creation.

He applauded the banking sector for moving to help traders who were been affected by Covid 19.

Mbadi noted that the banking sector has extended loans amounting to slightly over Sh6 billion distributed to 47 counties.

He said the National Treasury has put in place measures to progressively start the payment of all government pending bills owed to businesses to enhance growth.