Why for MSMEs to scale, financing must meet them where they are
The key to unlocking the potential of East Africa’s small businesses lies in taking financing and support directly to them, rather than waiting for them to walk into a bank.
This was the key message by Absa Bank Kenya during a key panel discussion at the 25th EAC MSMEs Trade Fair at Uhuru Gardens in Nairobi.
The panel discussion, a key feature of the day, zeroed in on these financing gaps. Representing the banking sector, Absa Bank Kenya, Director of Business Banking, Elizabeth Wasunna-Ochwa, outlined the institution’s evolving approach to supporting small and medium enterprises.
Wasunna said banks are moving beyond traditional methods to engage with SMEs more directly. “The biggest thing that we have done differently… is to say, let’s have conversations with SMEs, not in our offices, but in the grounds wherever they are,” she said. She highlighted two critical shifts, a push towards unsecured lending, backed by credit guarantee funds to de-risk the process for banks and a focus on providing business knowledge and training, not just capital. “There are two basic principles that we must be able to embrace to ensure that we are walking the journey with SMEs. One is to provide sustainable financing for SMEs, and two is to make sure that SMEs have the non-financial support for them to truly grow into corporates of the future,” Wasunna said.
The panel also stressed the importance of SMEs integrating into larger corporate value chains and leveraging digital tools to access new markets, echoing regional initiatives like Burundi’s upcoming national e-commerce strategy.
In his opening remarks, Micro, Small and Medium Enterprises (MSMEs) Development Cabinet Secretary Wycliffe Oparanya, said: “MSMEs contribute about 30% to Kenya’s GDP and create over 90% of jobs, yet still face challenges such as limited market access, financing gaps, and climate-related disruptions.”
Oparanya hailed the impressive turnout of over 3,000 exhibitors from across East Africa showcasing their products and services at the trade fair.
The EAC MSMEs Trade Fair, held in partnership with the International Trade Centre (ITC), featured a High-Level Ministerial Roundtable focused on unlocking opportunities for MSMEs and promoting youth-led innovation and enterprise development. The discussions would inform a communiqué to the EAC Heads of State Summit, advocating for greater regional support for MSME growth and scalability.