The government has taken a major step to address the financing challenges facing Micro, Small and Medium Enterprises (MSMEs) with the planned establishment of the Kenya Credit Guarantee Company (KCGC).
Principal Secretary Dr. Chris Kiptoo, representing Treasury Cabinet Secretary John Mbadi, on Tuesday joined senior government officials, development partners, and financial sector leaders in a high-level meeting convened by the National Treasury to fast-track the initiative.
The KCGC is expected to build on the Credit Guarantee Scheme launched in 2020, which has already channelled KSh 6.6 billion to 4,315 MSMEs across 46 counties. With a seed capital of KSh 3 billion from the government and strong commitment from banks, the new company aims to dismantle collateral barriers, mobilise private and development partner investments, and expand access to affordable financing.
According to the Treasury, MSMEs employ more than 15 million Kenyans and contribute nearly 40% of the country’s GDP, yet face an estimated KSh 2.5 trillion credit gap. By bridging this gap, the KCGC is expected to power sustainable enterprise growth and deepen Kenya’s financial ecosystem.
The government will hold a 25% stake in the new entity to ensure efficiency, transparency, and sound governance, while leaving majority ownership to the private sector and development partners.
Participants at the meeting included Kenya Bankers Association Chair and KCB Group CEO Paul Russo, World Bank Country Director for Kenya Qimiao Fan, and senior representatives from government and the banking industry.
Officials noted that the initiative aligns with the Bottom-Up Economic Transformation Agenda (BETA) and Vision 2030, positioning MSMEs as key drivers of inclusive growth.
By Michelle Ndaga
