BUSINESS OWNERS GET COVID-19 LOANS

BUSINESS OWNERS GET COVID-19 LOANS

By Samuel Migele

Over 200 local businesses in Kenya

applied for COVID-19 relief loans under a

programme run by Kenya Private Sector

Alliance (KEPSA) and Mastercard Foundation.

The first set of beneficiaries have received the

loans and several more are under review,

pending disbursement of funds.

The Mastercard Foundation COVID-19 Recovery

and Resilience Programme for micro, small and

medium enterprises (MSMEs) aims to benefit

400 MSMEs through the partnership with

KEPSA, whose operations have been adversely

affected by the COVID-19 pandemic.

The beneficiaries, who include women- and

youth-owned enterprises, receive interest-free

loans ranging between Kshs 100,000 to Kshs

1.5 million without any collateral, and payable

within six months. The business must be a

KEPSA member either directly or through a

member Association, (refer here for KEPSA

member associations) and must have been in

existence for at least six months to be

considered eligible to apply.

“We are working to spur economic recovery

with a focus on small businesses, and these

loans can be used to restart and rebuild

businesses as the pandemic-related restrictions

continue to be lifted and recovery begins,”

KEPSA Chief Executive Officer Ms. Karuga says,

adding “We anticipate to see more businesses

receive funds in due course.”

The Mastercard Foundation COVID-19 Recovery

and Resilience Programme aims to assist local

businesses to weather and respond to the

negative effects of the COVID-19 pandemic,

while strengthening their resilience in the long-

run. Besides providing loans, the programme

also enables MSMEs to share knowledge

between them, and provides coaching to

businesses on how to navigate the prevailing

market disruptions.

The programme was launched in June this year

and the loan application period is expected to

be closed by the end of January 2021.

While the majority of the businesses applying

for the loans are based in Nairobi County,

applications have been received from 17

counties across the country. Among those that

have already received loans are businesses in

real estate, insurance, retail, and education

sectors, which are some of the most hard-hit

sectors by the pandemic.

Majority are women-owned businesses, with the

average age of the applicants being more than

35 years. A KEPSA survey in October showed

that 64% of the MSMEs surveyed had

experienced high or very high negative impact

on their businesses from COVID-19, which

included loss of customers, liquidity challenges,

high cost of operations, inability to pay salaries,

and reduced labour productivity.

“We are encouraging more business owners to

apply for this facility to boost their businesses,

as they are the lifeblood of our local economy,”

says Lilian Mramba, Grassroots Business

Funds (GBF) Regional Director for Africa,

adding, “The uptake is encouraging as we have

received applications from 17 counties across

the country. We expect more applications from

January as most businesses are gearing to

resume.”

GBF, a global impact investment organization,

is the facility’s fund manager. The application

process is online through a portal run by

KEPSA.