Mvurya-KDC gives Sh300 million loan to Murang’a Sacco for lending to SMEs
By Mutiso Mbithi(MyGov)
The Kenya Development corporation (KDC) has disbursed a Sh300 million loan to a Murang’a based Sacco to facilitate support for Micro, Small and Medium-sized Enterprises(MSMEs) under a state-backed credit scheme facilitated by the Ministry of Investments, Trade and Industry.
According to Cabinet Secretary Salim Mvurya, the loan facility will enable small businesses to access low-interest loans through the Supporting Access to Finance and Enterprise Recovery (SAFER) Project run by the ministry whose aim is to increase access to financial services, enhance capabilities and support post-covid 19 recovery of MSMEs.
“KDC’s role goes beyond providing financial aid. We are dedicated to creating an environment where businesses can succeed by channeling liquidity support through wholesale loans to participating financial institutions, including regulated Savings and Credit Cooperatives (SACCOs), micro finance banks, and commercial banks,” said Mvurya in a statement to MyGov.
The Ministry, Mvurya added, will ensure that these institutions are well equipped to extend credit services to viable MSMEs.
Supporting Access to Finance and Enterprise Recovery (SAFER) Mvurya said, which is the brainchild of the Government through the Kenya Development Corporation and the Ministry of Investment, Trade and Industry and the National Treasury is one of four financial projects funded by the World Bank to empower the Murang’a Sacco to provide essential financial services to local businesses hence driving economic activity and fostering long-term prosperity.
Mr. Mvurya noted that the SAFER project is a game changer because it affords small firms who would not ordinarily qualify for commercial bank loans to access money for expansion.
"I want to re-affirm the Government's unwavering dedication to fostering economic resilience and inclusivity and this partnership between the KDC and Amica Sacco exemplifies the successful collaboration between public and private entities to achieve shared objectives,” said the CS.
The Cs said his ministry’s support for MSMEs is a key pillar of the Bottom-Up Economic Transformation Agenda.
“By aligning with this agenda, we are committed to building an economy that provides opportunities for all Kenyans and ensures that every individual, regardless of their circumstances, can contribute to and benefit from our nation’s economic growth,” said Mvurya.
The Principal Secretary for Investments Mr. Hassan Abubakar said it was the Government’s wish to spur vibrant and sustained economic growth through such initiatives like the SAFER project.
Abubakar noted that the financial backing from the SAFER Project through KDC is anticipated to spark a wave of business innovations in the country.
“The transaction marks the development financier’s increased lending to Saccos, SMEs and women-led enterprises, with the institution having disbursed billions of shillings to several businesses in the past three years,” said the PS.
Proponents of the SAFER project described the initiative as a transformative impactful initiative which will enable the Murang’a Sacco to grow and offer even more impactful support to viable businesses, stimulate growth and contribute significantly to the region's recovery.
The global lender typically provides loans with an agreement that the funds will be used to lend to SMEs, women owned firms and green energy projects as part of its social and environmental impact investing.
The beneficiary of the loan, Amica Sacco which draws its membership mainly from farmers, was formed to promote, organise and administer savings and credit solutions in order to afford members the opportunity to accumulate savings and access loans at affordable interest rates.
Dr. James Mbui the CEO of Amica Sacco said the facility will significantly enhance its capacity to provide financial services to local businesses, contributing to the economic uplifting of the businesses they serve.
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Ministry of Investments, Trade and Industry Cabinet Secretary Salim Mvurya.
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