The State Department for Micro, Small and Medium Enterprises (MSME) Development was established vide Executive Order No. 1 of 2023 under the Ministry of Cooperatives and Micro, Small and Medium Enterprises Development. The Department is charged with the responsibility of coordinating and mainstreaming the MSMEs development function in Kenya.

The Executive Order outlines the functions of the State Department as transformation of MSMEs sector including MSME Policies, financing, administration of Financial Inclusion (Hustler Fund) and Affirmative Funds, Capacity development, market development, technology upgradation and modernization and enhancing competitiveness of MSMEs.