Kenya Bankers Association Commits Ksh450 Billion to Support MSMEs

Members of the Kenya Bankers Association (KBA) have pledged Ksh450 billion to support Micro, Small, and Medium-sized Enterprises (MSMEs) over the next three years. This initiative is part of the banking sector’s commitment to providing more affordable credit to boost growth and development.

Speaking at the opening of KBA’s 2024 MSME Summit and the release of the Banking Industry Total Tax Contribution Report 2023, KBA Chairman John Gachora, who is also the NCBA Bank Group Managing Director, emphasized the importance of supporting MSME growth for economic development and poverty reduction through innovative business solutions. Gachora reiterated the industry’s commitment to enabling MSMEs to formalize, access credit, and contribute to economic growth and job creation. “As an industry, we acknowledge that MSMEs play a crucial role in our economy, contributing about a third to Kenya’s GDP and providing 8 to 9 of every 10 job opportunities in the country,” he said.

Kenya’s President William Ruto praised the banking sector for its commitment to doubling financial support to MSMEs, adding that the government would back this initiative through policy and institutional support. “I commend the banking industry’s pledge to double lending to MSMEs by providing Ksh150 billion in new loans annually, beginning 2025. The government will support this bold and innovative move through policy and institutional support, including measures to guarantee the prompt payment of all pending government bills, which will commence once the ongoing verification process is completed,” said President Ruto.

Dr. Ruto also highlighted the banking sector’s collective tax contribution of KES 825 billion to the economy over the last five years (2018-2023), describing it as the backbone of Kenya’s economic growth and development agenda. “The banking industry’s tax contribution in the 2023 financial year alone stood at a record Ksh 190.26 billion, a clear demonstration of the sector’s commitment to supporting our national development goals,” he noted.

The President called for collaborative efforts between banks and the public sector to enhance financing to the manufacturing sector to spur investments and growth. “I commend the banking sector for this bold initiative, which will undoubtedly unlock the potential of our MSMEs and propel them to greater heights,” he said. “By formalizing their operations and accessing credit, these enterprises will not only contribute to economic growth but also create much-needed employment opportunities for our youth.”

National Treasury and Economic Planning Cabinet Secretary, John Mbadi, emphasized the importance of a predictable tax environment to foster continued growth and investment in the banking sector. “The implementation of a national tax policy and clear tax laws will reduce litigation between taxpayers and revenue authorities, creating a more conducive environment for businesses to thrive,” Mbadi said.