New KSh 5 Billion Fund Launched to Propel Kenyan SMEs Beyond Survival to Growth
In a significant boost for the country’s economic backbone, the Kenyan government in partnership with a consortium of commercial banks has unveiled the Enterprise Growth and Transformation Fund, a KSh 5 billion facility designed specifically to help Small and Medium-sized Enterprises (SMEs) scale their operations. The fund, announced by the Cabinet Secretary for Investment, Trade, and Industry, aims to move beyond basic financing by offering affordable credit, structured business mentorship, and access to new markets, addressing the critical barriers that have historically stifled SME expansion in Kenya.
The initiative targets established SMEs that have demonstrated potential but are constrained by a lack of capital for investment in technology, workforce expansion, and market penetration. Unlike standard loans, the fund will offer a blended finance model, combining low-interest loans with a conditional grant component for businesses that achieve specific growth milestones in job creation and revenue. Our focus is on transitioning small businesses from mere survival to sustainable growth. We are not just giving out money; we are building a partnership for growth that includes hand-holding through expert mentorship, the CS stated during the launch at the Kenya School of Monetary Studies.
The business community has welcomed the intervention with cautious optimism. The Kenya National Chamber of Commerce and Industry (KNCCI) acknowledged that access to affordable, long-term capital has been a perennial challenge. If implemented transparently and efficiently, this fund can be the catalyst that allows our local industries to compete regionally and create the jobs our economy desperately needs, said the KNCCI President. However, some SME owners expressed concerns about the complexity of the application process and urged the fund managers to ensure it is accessible to businesses outside of Nairobi.
The long-term vision for the fund is to create a new cohort of mid-sized companies that can attract further investment and become listed on the Nairobi Securities Exchange (NSE). The program will be rolled out in phases, with the first phase targeting SMEs in the manufacturing, agro-processing, and digital services sectors. Its success will be measured by its ability to demonstrably increase SME contributions to the GDP and formal employment. This is a strategic investment in Kenya’s homegrown giants of tomorrow. We are deliberately building our next generation of industrial leaders, the CS concluded, signaling a renewed focus on structured SME development as a core economic strategy.