The Co-operative Bank of Kenya has embarked on a spirited drive to capacity build the Micro, Small and Medium Enterprises (MSMEs) in the country in order to increase productivity and ensure maximum returns.
Among the key benefits the bank is seeking to impart in the larger pull of private investors in the country financial support and literacy alongside access to affordable credit.
Additionally, the bank’s focus in supporting MSMEs is informed by similarities that cooperatives share with the small businesses, including involvement in primary level of production or at last retail section and being considered to be at risk.
Moreover, most of them have no access to formal borrowing avenues owing to stringent lending requirements by lenders.
Among the key challenges the MSMEs face include struggle to get external financing for their projects mainly due to difficulty in securing guarantees and collateral to enable them get lending.
Recently, Co-op Bank Nyahururu Branch hosted business customers to a panel discussion at the MSME forum happening today at the Panari Resort, Nyahururu to drive the capacity building initiative.
“MSMEs require more capacity building in credit access to ensure they remain afloat.” Peter Maina Gaita of Country Focus Agro Supplies Limited said during the panel discussion in Nyahururu.
Co-operative Bank hence recognises lack of funding for MSMEs as a setback that causes failure for the enterprises to achieve economies of scale for expansion.
Furthermore, the small size of businesses with no fiscal support hinders adoption of Research and Development (R&D) and technology, hence impending efficiency and productivity.
The bank’s major focus in this drive is on market facilitation and promoting ease of doing business for the MSMEs in the country.
It all boils down to the fact that Cooperative Bank has a rich 50-year history of supporting MSMEs in Kenya, with over 13 million customers who are mostly in retail business.
It enjoys a $75 million long-term funding from International Finance Corporation (IFC) for onward lending to MSMEs.
