The State has rolled out a training programme for youth on how to access funding from the newly launched Stawisha Mashinani programme.
Trade Chief Administrative Secretary Lawrence Karanja said this will enable them to start small and medium enterprises.
He noted that though small enterprises particularly in the informal sector were key drivers of the economy, their growth is not consistent in the last three years due to poor credit access largely driven by the rate cap regime.
Karanja who spoke at Menengai East Social Hall in Bahati Sub-County where the training was officially unveiled noted that banks categorized small business owners as risky borrowers and that most investors in the informal sector do not have securities.
Last year on Jamhuri Day, President Uhuru Kenyatta spelt out plans to introduce Stawisha SME Mashinani, coupled with unspecified administrative measures to deal with the challenges facing the sector.
Operationalization of Stawisha SME Mashinani programme is set to commence in June following the signing of a memorandum of understating between various state agencies under the Ministry of Industry, Trade and Enterprises Development and IDB Capital Limited.
The programme which has so far secured Ksh 4 billion in consolidated funds geared towards small business funding.
The five state agencies under the Ministry which include Industrial, Commercial Development Corporation, the Kenya Industrial Estate, the Micro, Small Enterprises Authority and the Kenya National Trading Corporation will drive President Uhuru Kenyatta’s SME agenda.
The state bodies will share information in order to contribute to growth of MSMEs at the grassroots level.
“In particular, the parties will exchange information on events, contacts of their field staff and information of available product and services,” the agreement stated.
Menengai East MCA Wilson Mwangi observed that small businesses, especially in the informal sector have been a key contributor to Kenya’s economy accounting for close to 30 per cent of the country’s GDP.
The Chief Administrative Secretary stated that a small business owner will be able to access between Ksh 10,000 and Ksh 200,000 worth of capital, while the Kenya Industrial Estate will offer Ksh 50,000 to Ksh 20 million in SME loans.
On the other hand, IDB Capital and Industrial and Commercial Development Corporation will lend between Ksh 5 million and Ksh 200 million as well as Ksh 50 million to Ksh 1 billion respectively.
IDB Capital managing director Karen Kandie said interest on loans will be dependent on the risk profile of the business owner.