Economy

Billions pledged to support start-ups, SMEs during Obama summit

US President Barack Obama shakes hands with
US President Barack Obama shakes hands with Kenyan President Uhuru Kenyatta during the Global Entrepreneurship Summit at the United Nations compound in Nairobi on July 25, 2015. The sixth summit highlights investment, innovation and entrepreneurship in sub-Saharan Africa. AFP PHOTO | SAUL LOEB 

Nairobi became a scene of high-stake financial pledges as a number of institutions responded to US President Barack Obama’s call to fund entrepreneurship, setting aside billions of shillings for budding innovators. 

Chase Bank Kenya topped the list of the private firms after it committed to lend over Sh60 billion ($600 million) to small and micro-enterprises over the next three years.

“We’ll use our strong digital platforms to overcome proximity barriers and disburse the funds faster and more efficiently to SMEs,” said Chase Bank chief executive Paul Njaga on the sidelines of the sixth Global Entrepreneurship Summit (GES) officially opened in Nairobi on Saturday by Presidents Obama and Uhuru Kenyatta.

At the summit, the Global Entrepreneurship Network announced plan to open its Kenya operations and committed Sh10 billion ($100 million) for various entrepreneurial programmes.

Global venture firm, Village Capital has also took the cue, creating Sh1.3 billion ($13.2 billion) seed capital to benefit at least 25 entrepreneurs in Kenya.

Similarly, Coca Cola Africa foundation (TCCAF) has pledged Sh455 million ($4.5 million) to finance youth businesses.

The fund to be created under the TCCAF’s Youth Empowerment Initiative, will finance life skills training, business coaching and mentoring. A total of 25,000 youth are expected to generate jobs under the initiative.

Apart from financial institutions, mentoring organisation, Mara Foundation announced plans to empower one million youth and women entrepreneurs in the East Africa Community by the year 2020.

The Mara mentorship and financing will be delivered via its Ad-Venture Investments.  “The best way for starting entrepreneurs to overcome their fears of failure is to access mentorship from real business experts,” Mara Group founder Ashish Thakkar said. The Mara Foundation uses technology to enable networking, mentoring and e-training.

The commitments announced Saturday add to the Sh20 billion ($200 million) SME fund that US-owned Overseas Private Investment Corporation (OPIC) has been running in partnership with Kenya’s Equity Bank.

President Obama said the commitments have since surpassed the Sh101 billion ($1 billion) target that he set during last year’s US-Africa summit held in Washington DC to finance emerging entrepreneurs around the world.

“Today, I am proud to announce that not only did we make our goal, we surpassed it. We’ve secured more the $1 billion in new commitments from banks, foundations and philanthropists,” Mr Obama said.

Out of the Sh101 billion pledged, President Obama said, OPIC will contribute Sh10.1 billion to support 10,000 women enterprises around the world.

Saturday, the Tony Elumelu Foundation also announced a 10-year programme to raise Sh10 billon to empower 10,000 women entrepreneurs across Africa.