Small businesses are some of the winners in the 2023-24 Budget following an allocation of Sh10.7 billion.
In the spirit of looking out for the low-income citizen, the administration allocated additional Sh10 billion to the Hustler Fund with more cash going to women, youth and SMEs.
These Women Empowerment Fund was allocated Sh182 million, Youth Enterprise Development Fund Ssh75 million, Uwezo Fund Sh192 million and Sh300 million to SMEs in the manufacturing sector.
"These allocations will inevitably guarantee access to affordable credit to the hustlers, households and MSMEs, and therefore accord them opportunities to make their rightful contribution to nation building," said National Treasury Cabinet Secretary Njuguna Ndung'u.
The government believes the Hustler Fund, together with the other affirmative funds, will increase access to affordable credit to targeted persons and sectors and thereby increase their investments, leading to private sector-led growth.
The allocation to the Hustler Fund is in addition to Sh11 billion that the government has so far invested in the financial inclusion programme.
"This money has been revolving within the fund, providing low interest loans at eight per cent per annum to 16.07 million Kenyans, of which 7.1 million are repeat customers," Prof Ndung'u said in his Budget Statement on Thursday.
"So far, Sh30.8 billion has been borrowed from this revolving fund."
The document presented by the CS in the National Assembly also had a number of provisions to enhance business in this sector.
One of the provisions is for Competition Authority of Kenya (CAK) to exempt micro and small enterprises from merger notifications, thus supporting start-ups and digital businesses, among others.
"Further, (CAK) will monitor and conduct surveillance audits specifically in the manufacturing and agro-processing sectors, so as to protect MSMEs from incidences of abuse of buyer power," said the CS.
Ndung'u said the capital markets remain a critical catalyst in mobilisation of savings and investments towards productive enterprise in Kenya.
In order to support MSMEs access financing, the CS said the Capital Markets Authority has developed the Capital Markets (Public Offers and Disclosures) Regulations, 2023 that will enable MSMEs raise debt and equity capital via the Nairobi Securities Exchange.
"The authority is also implementing the Capital Markets (Investment Based Crowdfunding) Regulations, 2022 to support Kenyan Start-ups to raise finance from both global and local investors," he said.
He noted that the proposal to reduce excise duty from 20 to 15 per cent in respect of fees charged for telephone and internet data services and fees charged for money transfer services by banks, money transfer agencies, and other financial service providers will also have a big impact on MSMEs.
Treasury also proposed to reduce excise duty from 12 to 10 per cent of the excisable value on fees charged for money transfer services by cellular phone service providers or payment service providers licensed under the National Payment System.
"This will encourage retail transactions at a more affordable rate and promote economic activity at MSMEs level," the CS said.
The Kenya Deposit Insurance Corporation is also in the process of reviewing the current coverage limit of Sh500,000 with a view of protecting depositors from financial instability risks caused by inflation and rising interest rates.
