Financial Inclusion Conference and Investor Expo 2024

The PS for MSMEs Development Hon . Susan Mang’eni, has expressed confidence in the government commitments to deepen financial inclusion and the bottom of the economic pyramid to stimulate meaningful economic participation towards ensuring that no one is left behind. 

Speaking during the Financial Inclusion Conference and Investor Expo 2024 organized by the Association of Microfinance Institutions (AMFI-K), the PS acknowledged that Financial access remains the greatest barrier in the MSME sector stifling growth and scalability, hampering their potential to generate more jobs in the economy.

‘The World Bank report indicates that the MSME sector in Kenya faces a financing deficit of over Kshs. 2.6 trillion and the financing from the mainstream market towards the sector has been on the decline in the recent times owing to high risk characterized of the sector’ PS noted.

The PS urged Financial Institutions to go beyond financing as the only focus and invest in capacity-building programmes as well as market development for their beneficiaries to enhance their ability to borrow and repay. 

‘The FIs ought to understand the contexts through which their beneficiaries operate in and build a supportive ecosystem around them’ 

The PS noted that the government’s increased intervention in the sector is aimed at correcting the existing market failures in the credit market to unlock access at the bottom of the economic pyramid.

The PS shared some of the policy interventions that the government is implementing including the Hustler Fund which so far has disbursed close to Kshs. 57 billion reaching out to 24 million Kenyans almost three-quarters of the adult population. 

Through Fund the government is promoting a culture of credit worthiness in the Kenyan society, as a response to the conventional collateral systems which are out of reach by majority of Kenyans. 

The Hustler Fund’s credit repair mechanisms has also seen through over 2 million Kenyans who have demonstrated good borrowing behavior and are now ready to be graduated to higher loan limits including business loans. 

The government will be launching a national Hustler Fund Credit Score and socialize it to give Kenyans who do not own means of production unlimited access to affordable credit. 
Additionally, the government is finalizing on a Start-Up Bill and also developing a financial inclusion policy to support the MSME’s start-up ecosystem, where approximately 70% of ventures fail within the first three years. 

The Start-Up Bill will offer a financing framework for start-Ups and Early-stage businesses in Kenya and help foster innovation, attract talent, and crowd capital to the economy. 

She urged the Financial institutions to pull down silos and foster collaborations for a more impactful lending ecosystem.