The Kenya Private Sector Alliance (KEPSA) and the Mastercard Foundation have launched a fund to provide loans to four hundred micro, small and medium enterprises (MSMEs) whose businesses have been adversely affected by the Covid-19 pandemic. The loan facility will be interest free and repayable by up to six months.
The fund has been created through support from the Mastercard Foundation Covid-19 Recovery and Resilience Programme. It is targeting businesses that find it difficult to access financing from formal lending institutions such as banks and micro-financers. Priority will be given to businesses run by women and youth. KEPSA will carry out the screening of the MSMEs to ensure that they meet the criteria for eligibility to access the loans. The average size of the loans is expected to be Kshs. 1 million.
“These are bad times for everybody and a situation like this hits MSMEs the hardest. MSMEs operate in a difficult environment and research has shown that most of them last two years, and you can see how such a situation would pan out for them,” said Carole Karuga, CEO, KEPSA.
“Through the Mastercard Foundation Covid-19 Recovery and Resilience Programme, we are working with our partners to deliver tailored support to MSMEs that will sustain their activities and continue to provide opportunities for dignified work,” said Daniel Hailu, Mastercard Foundation regional head, Eastern and Southern Africa.
The fund (and the accompanying programme) is intended to strengthen the MSMEs’ capacity. KEPSA will provide technical support; such as helping the businesses to adopt digital solutions. In addition to screening the MSMEs, KEPSA will roll out a virtual hub and create a business recovery hub to support the critical sector by offering business development services.
It is being hoped that the programme will help in maintaining jobs and livelihoods. In addition, it will assist in identifying new business opportunities for women and young people, reduction of gender-based violence by enhancing the capacity of women-led and owned businesses to increase revenue and income, besides prioritizing the health and safety of employees, communities and healthcare workers. Moreover, it will enhance business and supply chain continuity.