With it comes a partnership which intends to spur growth in the SME sector which has faced difficulty in accessing affordable credit from lenders due to a lack of guarantees and collateral.
The partnership also purposes to address critical gaps for long-term financing while leveraging technology to increase uptake of capital market products.
The Chief Executive Officer (CEO) Wyckliffe Shamiah had this to say during the signing of the MoU.
“CMA is committed to working with KDC more closely than ever before to maintain the momentum in priority spelt out in our partnership which includes promoting SMEs and large enterprises utilizing of capital market security, pursuing education awareness and stakeholder engagement to promote an increase in knowledge and uptake of respective institutions’ products and services,” said Shamiah.
The memorandum will ensure education, awareness creation and stake holder engagements are carried out to increase knowledge and uptake of the products and services by the SMEs.
It will also promote the commercialization of SME ideas business advisory services will also be offered to struggling but promising businesses.
The move is aimed at empowering the growth of small businesses in Kenya which have often been underserved by financial institutions.
KDC is a state corporation under the Ministry of Industry, Trade and Cooperatives mandated to promote sustainable socio-economic development by providing development finance, infrastructure finance, business support and advisory services to medium and large-scale industries, infrastructure projects and commercial undertakings in target sectors in Kenya.
The CMA is the regulator for non-bank financial institutions in Kenya which include capital markets and pensions. It also regulates and promotes fair, orderly, and efficient functioning of the securities market.
SMEs are an important part of the Kenyan economy, accounting for over 95% of businesses and employing close to 80% of the Kenyan workforce.
The partnership is also intended to help CMA in executing its mandate of developing and regulating the capital markets while also deepening market participation.
There is optimism that the move will go a long way in helping SMEs in Kenya whose main challenge has been access to capital with many often resorting to taking up loans from informal lenders at very high rates.