By Patricia Okumu

The Capital Markets Authority (CMA) and the Kenya Development Corporation (KDC) have entered into a Memorandum of Understanding (MOU) to expedite the lending of credit to Small and Medium sized Enterprises (SMEs). 

This partnership is aimed at offering SMEs and major corporations inexpensive and reliable financial solutions as well as new opportunities to access pertinent and specialised services intended to help them expand their businesses.

A recent National Economic Survey report stated that SMEs account for 98 percent of all businesses in Kenya and contribute 3 percent of the country’s GDP in addition to creating 30 percent of all jobs annually. Despite all that, access to credit and financial solutions has been a recurrent problem for them. However, with this MOU at hand, the two organisations will work together to address Critical gaps and market failures that require long term funding for the SMEs.

Speaking during the signing ceremony, the CMA Chief Executive Officer Mr. Wyckliffe Shamiah said, “Strategic alliances are crucial for accelerating market development as they provide complementary expertise and support to the involved parties and consequently enhance their internal capacities. Such partnerships are important for the CMA as it aims to ensure that the country’s capital markets attain international stature and provide access to other markets.”

In addition to financial solutions, this MOU will ensure that SMEs are prepared to have access to non-financial services including business consulting and networking possibilities. Joint initiatives in education, awareness-building, and stakeholder engagement for the adoption of financial goods and services are also planned.

“At some point we will be looking to raise a social, green or even an infrastructure bond to mobilise resources for the critical sector,” noted KDC Interim Director General Christopher Huka.

“We expect to achieve a multiplier effect where increased employment will stimulate demand and further enhance private sector development, ultimately establishing sustainable and inclusive economic development.”