Micro and small enterprises adversely impacted by Covid-19 will benefit from a financial initiative of Mastercard Foundation and the Kenya National Chamber of Commerce and Industry.
The business recovery initiative targets 100,000 outlets operated mainly by youths and women in need of financial and technical support to preserve jobs under the prevailing market disruptions.Dubbed Mastercard Foundation Covid-19 Recovery and Resilience Programme, it is intended to expand access to financial services to ensure business continuity and sustainability. “Our goal is to help micro and small enterprises survive the economic downturn and improve their resilience to enable them to continue creating employment and contributing to the country’s economic resurgence,” KNCCI president Richard Ngatia said yesterday in a statement.
Ngatia said the intervention will focus on hawkers, the fashion industry, jua kali, retailers, and restaurants.It will run in partnership with RetailPay, a trade digital platform to support an e-commerce ecosystem for more agile and resilient enterprises. Small and medium size businesses in Nairobi and other urban areas are hardest hit by the pandemic, with some already shut rendering thousands of employees – mainly youths and women – jobless and destitute.Those still operating are struggling financially due to low business. “The Mastercard Foundation has come in handy to make this initiative a reality. We anticipate to reach out to 100,000 businesses as we roll out this premier programme,” the KNCCI boss said.
It is envisaged to resuscitate the national economy right from the grassroots to ensure cash flow, resumption of businesses and job creation.The primary beneficiaries for the year-long initiative are youths aged 18-35 and enterprises that support a large number of youth.Only medium, small and micro enterprises (MSME) which are KNCCI members are eligible for the free short-term concessional loan financing programme. KNCCI shall pre-screen applications from eligible applicants together with the Grassroots Business Fund (GBF) and the fund manager of the MSME finance facility.
Applications will be weighed against set eligibility criteria before approval and disbursement of funds. GBF will also offer technical assistance to businesses receiving the finances.“MSME’s are the backbone of the economy and they need support more than ever. The Mastercard Foundation is proud to work with these partners to deliver tailored support to tens of thousands of MSMEs,” Mastercard Foundation regional head Eastern and Southern Africa Daniel Hailu said.In May, the KNCCI signed a Sh200 billion deal with Equity Bank to mitigate post Covid-19 effects on MSMEs. The kitty beneficiaries must be chamber members from the 47 county chamber chapters.
A study of MSME done four years ago by the Kenya National Bureau of Statistics showed that there were 1.56 million licensed MSMEs and 5.85 million unlicensed businesses in both formal and informal sectors.However, the economy has stagnated since the Covid-19 pandemic.
The latest International Monetary Fund World Economic Outlook for 2020 shows that all the five East African countries – Kenya, Rwanda, Uganda, Tanzania and Burundi – will register an economic decline of 1 per cent.Globally, the economy is expected to record a downturn and contraction of up to 3 per cent.Last year, Kenya’s Gross Domestic Product was 5.6. This is predicted to drop to 1 per cent this year. The anticipated growth for 2021 is 6.1 per cent.