Treasury's soft loans plan offers small firms lifeline
Monday, May 25, 2020 9:00
By ELIZABETH KIVUVA
Small and mid-sized firms are Kenya’s biggest employers.
The affordable loans for small and micro firms are the product of a newly established credit guarantee scheme and Treasury-backed plan which will offer banks additional cash for onward lending to the small firms.
Similarly, the government will provide guarantees of 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.
Small and mid-sized firms are Kenya’s biggest employers and the Treasury has tipped them to get back to hiring in an environment where big companies are shedding jobs and freezing fresh employment.
Despite the offers made by the Treasury to bail out the small firms, many of them have complained that loans are coming through too slowly and that some banks have imposed tough criteria on granting credit on fears of default in a business environment where companies have seen a plunge in sales due coronavirus restrictions.
