(Nairobi) – The United Kingdom has unveiled a significant financial initiative designed to support Kenya’s Micro, Small, and Medium Enterprises (MSMEs). This initiative represents a part of the UK’s longstanding commitment to spurring economic growth and job creation in East Africa.
The British High Commission in Nairobi announced a new fund totaling Sh670.80 million ($5.2 million) to be managed by FSD Africa. This fund, known as the Listed SME Debt Fund, is expected to have widespread impacts, targeting support for at least 10,000 MSMEs and delivering benefits to over 50,000 households. Additionally, the initiative aims to create or safeguard around 89,000 jobs and improve access to essential services for more than 200,000 people across Kenya.
The fund is set to support a variety of Kenyan business sectors, including crafts, finance, and agriculture. The goal is to reduce the cost of borrowing for small business owners, enabling more accessible growth opportunities.
| Key Fund Goals | Expected Impact |
|---|---|
| SME Support | 10,000 MSMEs across various sectors |
| Household Benefits | Reach over 50,000 households |
| Job Creation/Protection | Create or protect approximately 89,000 jobs |
| Improved Service Access | Reach 200,000+ people |
| Total Financing Target | Sh38.70 billion ($300 million) |
Neil Wigan, British High Commissioner to Kenya, emphasized the fund’s objective of lowering borrowing costs, a major barrier for many small businesses in the country. “This fund further bolsters the UK’s financial toolkit in Kenya, supporting long-term job creation and economic growth,” said Wigan. “It aims to benefit all the hardworking entrepreneurs in Kenya, particularly women, young people, and individuals with disabilities, who are often marginalized within the economy.”
SMEs play a crucial role in Kenya’s economy, comprising 98% of businesses and contributing approximately 24% to the country’s gross domestic product (GDP). Additionally, SMEs account for around 30% of employment, with significant representation among youth, women, and people with disabilities. Despite their importance, many SMEs face high borrowing rates—some as high as 40%—which restricts their growth potential. The new fund aims to address this problem by creating a more attractive borrowing landscape for these enterprises.
Mark Napier, CEO of FSD Africa, highlighted the transformative potential of the SME sector for Kenya’s socio-economic development. “We are excited to launch this innovative fund dedicated to supporting small and medium enterprises in Kenya. This fund will make affordable credit available to businesses that have traditionally faced challenges in securing financing,” said Napier. He further noted that the fund would provide MSMEs with new growth opportunities, allowing them to expand both locally and regionally.
The Listed SME Debt Fund aims to mobilize a total of Sh38.70 billion ($300 million) in sustainable financing for Kenya’s small businesses. Of this total, Sh30.96 billion ($240 million) is expected to come from domestic institutional investors, with the remaining amount sourced from international investors.