KDC-World Bank deal sets aside Sh7.1B to loan SMEs

Small and medium enterprises in Kenya still reeling from the negative impacts of the Covid-19 economic downturn can access loans to aid their recovery from the Kenya Development Corporation Limited (KDC).

KDC has announced the opening of loan applications under the Supporting Access to Finance and Enterprise Recovery Project (SAFER), into which it will inject Kes7.1 billion, in an attempt to boost the recovery of the Micro, Small and Medium Enterprises (MSMEs).

SAFER, a World Bank-backed initiative, seeks to empower enterprises to strengthen their endeavors and expedite post-pandemic resurgence.

Under this initiative, individual micro-enterprises stand to access loans ranging from Kes7,000 to Kes150,000, while small enterprises can secure credit of up to Kes250,000.

These financial provisions aim to cater to the diverse needs of MSMEs, facilitating their ability to tackle immediate challenges and capitalize on growth prospects.

Read also: KDC’s offering to drive tourism recovery

Moreover, financial institutions can also tap into the fund, with KDC proposing to extend loans ranging between Kes10 million and Kes500 million to each participating financial institution for onward lending.

While specific interest rates are undisclosed, loan durations are fixed at 60 to 120 months, including a grace period of up to 12 months.

Microloans, tailored for individual microenterprises, will have a maximum repayment duration of 18 months, while small enterprises accessing loans through SAFER will enjoy a longer repayment period of up to three years.

Regulated financial entities, such as Savings and Credit Cooperatives supervised by the SACCO Societies Regulatory Authority, Microfinance Banks overseen by the Central Bank of Kenya, and Commercial Banks offering digital lending services tailored to MSMEs, are encouraged to submit applications for engagement with SAFER. The application window which is 21 days, started on Tuesday, May 14 and will conclude on June 11.

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