Kenya Credit Guarantee Scheme (KCGS) Forum
The MSME and Development Principal Secretary Hon. Susan Mangeni participated in a high-level stakeholder engagement forum on implementation of the Kenya Credit Guarantee Scheme (KCGS). The event brought together key stakeholders from the government, financial institutions, MSME sector representatives, and development partners to assess the scheme’s progress and explore strategies on Rural Kenya Financial Inclusion Facility (RK-FINFA).
The Kenya Credit Guarantee Scheme (KCGS) was established to address the persistent challenge of limited access to affordable credit for MSMEs, a sector that forms the backbone of the Kenyan economy. So far, the scheme has disbursed 6.34 billion to 4147 MSMEs as of September 2024. To enhance access to credit by enterprises in the rural Agribusiness sector, the government is rolling the Rural Kenya Financial Inclusion facility that will enhance financial inclusion for small businesses in rural areas. By providing partial guarantees to financial institutions, the scheme aims to de-risk lending to small enterprises, thereby fostering economic growth and job creation.
In her remarks, PS Susan Mangeni highlighted the importance the scheme has in empowering MSMEs and driving economic resilience. “The Kenya Credit Guarantee Scheme is instrumental in unlocking access to credit for countless small businesses that would otherwise struggle to secure financing. As we review its implementation, our focus is on identifying ways to make it even more impactful to our MSMEs,” she stated.
PS Mangeni emphasized the government’s commitment to addressing financial mechanisms for MSMEs. “We are keen on working with financial institutions and other partners to simplify processes, increase awareness, and ensure that the scheme reaches every corner of the country. MSMEs are at the heart of Kenya’s development agenda, and their success is our success,” she added.
Key recommendations from the forum included enhancing capacity-building initiatives for MSMEs to improve their financial literacy, simplifying the application process for credit, and increasing the budget allocation for the scheme to reach more businesses. Financial institutions were also urged to offer tailored products that meet the unique needs of different categories of MSMEs.
As the Kenya Credit Guarantee Scheme continues to evolve, it is expected to play a pivotal role in driving economic growth, fostering entrepreneurship, and creating sustainable jobs in the country.