FILE PHOTO | NMG
About 75 percent of Kenya’s small and medium-sized businesses face collapse if they fail to get fresh funds from banks or equity partners by end of next month, a Central Bank of Kenya (CBK) survey reveals.
Citing a study conducted in April, CBK Governor Patrick Njoroge on Thursday said the small businesses surveyed had said that without help they would close by the end of June because they lacked credit buffers and other resources to survive the slowdown caused by the Coronavirus.
The government will provide guarantees for loans given to Kenya-based small and medium-sized businesses, meaning the government commits to repay banks a share of the loans should the small traders default.
More Kenyans are starting to operate small businesses out of the boots of their cars to make ends meet as the coronavirus crisis has hit jobs and the economy.
Without the government stepping in to shoulder some of the credit risk, banks are unlikely to expand their lending to the small businesses that face the biggest challenge in funding their working capital and expansion projects.
