Kenya’s banking sector, under the Kenya Bankers Association (KBA), has announced a Sh450 billion financial boost to Micro, Small, and Medium-sized Enterprises (MSMEs) over the next three years, beginning in 2025.

This strategic move aims to address one of the key challenges faced by MSMEs—limited access to finance—and is intended to support their growth, development, and ability to access more affordable credit.

The announcement was made during the launch of the MSME Accelerator Programme and the release of the Banking Industry Total Tax Contribution Report 2023 at the Kenyatta International Convention Centre (KICC).

The programme aims to provide MSMEs with mentorship, financial literacy training, and enhanced market access to help them formalise their operations and scale their businesses.

President William Ruto, who was present at the event, praised the banking industry for its substantial commitment to doubling financial support to MSMEs.

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He emphasised the government's readiness to offer policy and institutional support, highlighting the significant role MSMEs play in Kenya's economy.

“The government recognises, embraces and champions the critical contributions of MSMEs, notably in creating between 80 and 90 per cent of jobs and generating nearly a third of the Gross Domestic Product (GDP). Without a doubt, under the right conditions, MSMEs have even greater potential to drive national economic transformation at an accelerated pace, creating jobs for our youth and improving the livelihoods of both urban and rural communities and enterprises,” President Ruto remarked.

He further expressed his approval of the event's focus on MSME empowerment, stating, “I am particularly encouraged by the thematic focus of this event because the empowerment of MSMEs is at the core of the Bottom-Up Economic Transformation Agenda, which is our vehicle to deliver equitable development and inclusive growth that engages all citizens.”

Additionally, the President commended the banking industry’s pledge to inject Sh150 billion annually into MSMEs, stressing that the government would support this “bold and innovative move” by guaranteeing the prompt payment of all pending government bills.

This, he noted, would begin after the completion of the ongoing verification process.

John Gachora, Chairman of the KBA, also expressed the banking sector’s dedication to empowering MSMEs, acknowledging the critical role these enterprises play in Kenya’s economy.

“In line with our dedication to MSMEs, I am proud to announce that the banking sector has committed Sh150 billion per year over the next three years to support these enterprises,” Gachora said.

He noted that approximately 40 per cent of small businesses in Kenya face difficulties in accessing the capital needed for expansion.

Gachora called on the government to address the issue of delayed payments to MSMEs, which currently amount to Sh70 billion, hindering business viability and disrupting supply chains.

The event also shed light on the banking sector’s significant tax contributions, with President Ruto lauding the sector for its collective tax contribution of Sh825 billion over the past five years.

The 2023 financial year alone saw the industry contribute Sh190.26 billion, demonstrating its ongoing commitment to national development goals.

National Treasury and Economic Planning Cabinet Secretary, John Mbadi, echoed the importance of a predictable tax environment to foster growth in the sector.

“The implementation of a national tax policy and clear tax laws will reduce litigation between taxpayers and revenue authorities, creating a more conducive environment for businesses to thrive,” Mbadi stated.

The 2024 Inua Biashara MSME Exhibition, themed “Accelerating MSME Development for Sustainable Economic Growth”, is set to empower MSMEs further by facilitating access to tailored financial solutions, fostering innovation, and promoting long-term sustainability.