Small businesses emerged as one of the big beneficiaries of this year’s Budget as the government strives to ease access to finance.
One of the measures will be increased allocation to a credit guarantee scheme for small businesses from the current Sh4 billion to Sh10 billion in the medium term.
“Since the launch of the credit guarantee scheme in December 2020, loans extended to micro, small and medium enterprises (MSMEs) had surpassed Sh2.2 billion by December 2021,” said National Treasury Cabinet Secretary Ukur Yatani in Nairobi yesterday.
“This has expanded access to affordable credit to MSMEs in 45 counties, across different sectors of the economy.”
Mr Yatani said the government will seek the support of development partners to increase the scheme’s capital over the medium-term.
In the 2021-22 financial year, the government allocated Sh3 billion to the scheme as seed capital to de-risk lending to small and medium enterprises.
The Budget, which comes on the backdrop of high cost of living and Russia’s invasion of Ukraine that has disrupted the global economy, also allocated Sh626 million to micro, small and medium-sized enterprises (MSMEs) through the Kenya Industrial Estates. Mr Yatani said MSMEs play a significant economic role in creating employment and driving economic growth.
According to FinAccess survey on MSMEs by the Central Bank of Kenya, there were 915,115 active MSME loan accounts in the banking industry as at December 2020, with a total value of Sh638.3 billion.
Between 2015 and 2019, about 846,000 new jobs were created, with an estimated 768,000 created by small businesses.
The stimulus programme implemented to support economic activities and mitigate the adverse effects of the Covid-19 pandemic on businesses, allocated an additional Sh2 billion to SMEs in the manufacturing sector.
Businesses owned by youth, women and persons living with disabilities are also reaping big from President Uhuru Kenyatta’s final Budget.
CS Yatani has allocated Sh13.1 billion to the National Youth Service, Sh2.2 billion to the Kenya Youth Empowerment and Opportunities Project, Sh175 million for the Youth Enterprise Development Project, Sh170 million for the Women Enterprise Fund and Sh92 million to the Youth Employment and Enterprise Fund.
The government further allocated Sh6.95 billion to support enterprises owned by women, youth and persons with disabilities through the Uwezo Fund.
To stimulate growth of the enterprises operating in the Jua Kali sector, the government imposed import duty on imported furniture at the rate of 35 per cent for a further one year.