Over 200 local businesses in Kenya have applied for Covid-19 relief loans under a programme run by the 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.
Beneficiaries, who include women- and youth-owned enterprises, receive interest-free loans ranging between Kshs 100,000 (US$ 1000) 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 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 Carole 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.
In September 2020, the Kenya National Chamber of Commerce and Industry (KNCCI) and the Mastercard Foundation entered into a partnership that will see 25,000 MSMEs in Kenya benefit from an interest-free, zero-fee short-term concessional loan.
The programme was implemented by KNCCI through its county chapters across the 47 counties.
Through the Mastercard Foundation Programme, KNCCI will target businesses owned by youth (18-35 years), women-owned (18-70 years) and enterprises that support a large number of youth (18-35 years) that have been impacted by the Covid-19 pandemic.
The aim of this programme is to assist the MSMEs to ensure business continuity and sustainability.
Applications can be accessed through the KNCCI website and from any of the KNCCI offices across the country.
The target businesses need to have been in existence for at least one year and have been affected by the Covid-19 pandemic. These businesses will mainly be drawn from the sectors of hawkers, Jua Kali, retailers, the fashion industry and restaurants.
The facility is a revolving fund, available to repeat borrowers upon repayment of the loan within two months. The funds will not be available to businesses that sell drug-related substances including alcohol and tobacco, manufacture of weapons and are involved in war-related activities, in gambling and betting sectors, in sex-related industries, or are owned by the state or parastatal actors.
KNCCI was pre-screening applications from eligible applicants.
Applications received from affected businesses will be pre-screened against a set eligibility criterion before approval and the disbursement of funds.
The loans are being administered by Grassroots Business Fund (GBF) and Fourth Generation Capital (4G Capital).
The application process is online through and in the associations’ offices countrywide.
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.
KNCCI is running interventions that include low-cost businesses loans to deserving MSMEs and a trade digital platform to support e-commerce.
The intervention target 15,000 direct members of KNCCI, supplemented by 85,000 KNCCI association members, especially focusing on the hawkers, the fashion industry, Jua Kali, retailers, and restaurants.
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. The 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 per cent of the MSMEs surveyed had experienced a 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,” said Lilian Mramba, Grassroots Business Funds (GBF) Regional Director for Africa.
More applications are expected from January as most businesses are gearing to resume as the year starts.
GBF, a global impact investment organization, is the facility’s fund manager. The application process is online through a portal run by Kepsa.
The Mastercard Foundation has also partnered with the Shining Hope for Communities (SHOFCO) under the same resilience programme to support 10 urban slums in Kenya during the Covid-19 pandemic in a three-month partnership.
SHOFCO is on the front lines reaching the communities that are most at-risk for exposure to Covid-19 and hardest hit by the economic fallout from the pandemic.
The partnership targeted 10 of the 14 slums where SHOFCO has a presence including Kibera, Mathare, Mukuru, Korogocho, Kawangware in Nairobi; Bangladesh, Mshomoroni, and Maweni in Mombasa; and Nyalenda and Obunga in Kisumu.
Through the SHOFCO Women Empowerment Programme (SWEP), over 100 young women are now employed in liquid soap making, sanitiser packaging, and in the creation of community health workers and volunteers’ identification jackets.
Mastercard Foundation’s commitment to the four lead partner organisations totals US$ 15 million and will support a series of interventions that will facilitate business continuity, especially for those MSMEs led and owned by young women and help to cushion the economy in Kenya.