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The Ministry of National Treasury and Economic Planning has launched a significant policy shift aimed at bolstering Micro, Small, and Medium Enterprises (MSMEs) in the country. Spearheaded by the Ministry, the initiative welcomes public participation on the Draft Credit Guarantee and Amendment to the Central Bank of Kenya (CBK) Act at the Bomas of Kenya, Nairobi.
The policy shift is poised to provide a much-needed boost to the MSME sector, a vital component of the Kenyan economy. In essence, it grants the Central Bank an expanded mandate, primarily to oversee Credit Guarantee companies. Key aspects of the policy include enhanced oversight by the Central Bank, prudential treatment, public reporting, and government support for MSMEs.
Peter Macharia Kamau, CEO of a leading Credit-only Microfinance institution, expressed his support for the initiative. He stated, “This is a great initiative that will help boost the MSME segment, which mainstream banks often shy away from lending to, citing high risk. It will definitely bridge the unemployment gap and increase tax collections due to increased trade resulting from enhanced funding after the guarantee comes into effect. I fully support this.”
The move comes as a beacon of hope for MSMEs, addressing longstanding challenges they face in accessing credit from traditional financial institutions. By providing guarantees and oversight, the policy aims to mitigate risk for lenders, thereby facilitating increased funding opportunities for MSMEs.
The policy is expected to have a ripple effect on the economy, fostering job creation, stimulating economic growth, and ultimately boosting tax revenues. The emphasis on public participation underscores the government’s commitment to inclusive policymaking, ensuring that the voices of all stakeholders, including MSMEs, are heard and considered.
The Jijenge initiative represents a pivotal step towards unlocking the full potential of the MSME sector in Kenya. With the support of stakeholders and effective implementation, it has the potential to drive sustainable economic development and prosperity for all.
