Project Interventions

The SAFER is a 100 Million USD Credit from the World Bank through the International Development Agency (IDA). The Project being implemented under the National Treasury seeks to address market failures in access to finance by supporting increased access to credit to MSMEs, enhancing their capabilities, and supporting their recovery from the COVID-19 pandemic. The SAFER project became effective on 9th May 2022 for a period of 5 years.

The project is a financial intermediary facility that seeks to address structural challenges affecting MSMEs through three (3) components namely: (i) Innovation and liquidity support to MSMEs through injecting credit to Government owned wholesale Institutions through Sacco’s and MFBs for the provision of sub-loans to eligible MSMEs; (ii) de-risking of lending to MSMEs through by providing guarantee’s to MSMEs (iii) technical assistance and project management to project beneficiaries.

The project is designed to provide lines of credit to eligible MSMEs by leveraging existing financial channels i.e through Government owned Apex Institutions in this case the Kenya Development Corporation (KDC) who then lends at a whole to SACCO’s and Micro Finance Banks (MFBs) who eventually on lend to the MSMEs. The end objective is to address profound liquidity shortages to MSMEs including addressing disrupted operations of MSMEs resulting from the Covid-19 Pandemic that led to vulnerability and constraints in liquidity. In addition, the project shall leverage private capital towards de-risking of lending to the MSMEs by providing partial guaranteed loans geared towards reducing the risk of lending to formal MSMEs .

The Micro Small & Medium Enterprises (MSMEs) play a critical role in the economy with the sector employing an estimated 91% of kenyan's and contributing to 34% of the countries’ GDP according to the Economic Survey 2020. However, despite their enormous contribution to the economy, the MSMEs face many challenges majorly being access to affordable credit due to perceived risk by Financial Institutions. Furthermore, the Covid-19 pandemic added to these challenges hence affecting cash flow, creating losses and disrupted operations of the MSMEs.