The Kenya Private Sector Alliance (KEPSA) in partnership with US-based Mastercard Foundation, has launched an interest-free fund to cushion micro, small and medium-sized enterprises from disruptive effects of the coronavirus pandemic.
The loan, repayable within 180 days, has been created through support from the Mastercard Foundation COVID-19 Recovery and Resilience Program.
It targets over 400 financially distressed businesses that have challenges in accessing credit from banks and microfinance companies, based on screenings by KEPSA.
The KEPSA driven fund gives priority to those businesses that operated by women and the youth.
This initiative is happening following warnings from the Central Bank of Kenya(CBK) that there are firms that will run out of cash beyond June, due to adverse effects of COVID-19.
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A study undertaken by KEPSA in April 2020 revealed that the majority of enterprises across all sectors and company sizes had been affected by COVID-19, with small and mid-sized companies reporting the most significant impact.
“These are bad times for everybody and a situation like this hits micro, small and medium-sized enterprises the hardest. These firms already operate in a difficult environment, and research has shown that most MSMEs last two years. You can see how such a situation like the present one will pan out for them,” said KEPSA’s CEO, Carole Karuga.
KEPSA will carry out the screening of the Micro, Small, and Medium Enterprises to ensure they meet the criteria for eligibility to access the loans, with amounts of up to KSh 1 million.
The lobby will provide technical support, such as helping the businesses adopt digital solutions. It will also provide a virtual hub to support small businesses.
According to Mastercard Foundation Regional Head, Eastern and Southern Africa, Daniel Hailu, MSMEs are the backbone of the economy, and they need support now more than ever.
“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 Hailu.
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