Kenya National Chamber of Commerce and Industry (KNCCI) has signed a Memorandum of Understanding with Kenya Bankers Association (KBA) to support Small and Medium Enterprises (SMEs) in acquiring finances.
The MoU was signed by KBA CEO Dr Habil Olaka and KNCCI vice-chairman James Mureu, who was accompanied by outgoing KNCCI – Nairobi Chapter Chairman Richard Ngatia and senior chamber officials.
Speaking at the ceremony which was held at Nairobi Serena Hotel on April 26, 2019, Olaka said there was a need for the banking sector to play a critical role in enabling SMEs in Kenya to achieve business success.
“In Kenya, sadly so, the SME sector has been stifled partly due to their inability to easily acquire the financing they need to reach their potential. This has been coupled by the interest rate capping which came into place in 2016, prompting financial institutions to lock out potential and viable businesses from acquiring loans,” he said.
He announced that the association would support KNCCI through its Inuka program by making it easier for SMEs to access credit.
Mureu said the MoU would enable the two institutions to leverage each other’s strength, whereby the chamber membership will have easy access to business loans from KBA membership which consists of close to 50 financial institutions, most of which are commercial banks operating in Kenya.
Ngatia called on industry players to mitigate financial problems that hindered the SME sector from reaching its potential.
“SMEs are key to Kenya’s economy, yet financial institutions have in the recent past shunned away from supporting their working capital. Most of them collapse within their first three years of establishment,” said Ngatia.
“The SME sector is in dire need of support,” he added.
The pact comes a few weeks after the High Court declared the interest rate cap law unconstitutional and gave parliament 12 months to amend the law.
According to KBA, credit growth has slowed down since the law came into force in September 2016.
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