Lobby asks House to allocate SMEs cash for cheap loans

Money Markets

Traders say Parliament has not allocated any funds three years after the MSE Act was passed. PHOTO | FILE 

By JOHN GACHIRI

Small businesses are lobbying Parliament to speedily allocate money for the Micro and Small Enterprises (MSE) Fund, especially at a time commercial loans are pricey due to rising interest rates.

“Many medium and small enterprises are unable to receive funding for business activities from other
funds that have been established because there is broad knowledge that a dedicated fund is available under Section 51 of the Micro and Small Enterprises Act 2012,” said national chairperson Anthony Kwache.

He said the delay in establishment of the fund is a violation of the law and an impediment to the growth of the sector. Micro businesses account for 18 per cent of the economy and make up 82 per cent of the workforce.

The fund was set up in 2012 to offer SMEs loans at affordable rates, provide them invoice discounting facilities and act as guarantors for the businesses to access loans from banks and saccos.

The businesses were to access the funds through trade associations that had been registered with the MSE Authority.

Nairobi-based think tank Institute of Economic Affairs, which had organised a workshop at the Sarova Stanley in Nairobi to review the progress made since the MSE Act was enacted in 2012, said the MSE Authority has to first put its house in order.

The authority is yet to publish an annual report on its activities as required by the law despite receiving government funding for recurrent and development expenditure.

However, authority’s head of business advisory support Joseph Kanyi said annual reports for the past two years had been dispatched to the National Treasury.