Reports that Equity Bank #ticker:EQTY will get a Sh5 billion loan from the World Bank private enterprise arm IFC to lend to the small and medium businesses (SMEs) that have been slowed down by the coronavirus is a step in the right direction. Apart from the amount involved, it should go a long way in determining policies aimed at protecting the small businesses that, according State statistics, are the leading creators of jobs. Already the central bank has said these small businesses are in danger of collapsing under the weight of the disease that has brought the global economy to its knees.
Under the virus pandemic, these small businesses have been adversely affected by the restrictions in place to tame the spread of the disease that has infected more than 6,000 and killed more than 140 in Kenya. Due to Covid-19, they are struggling to open their doors, make sales, sustain stocks, and keep workers on board.
Among other things, the government ought to implement the proposed State guarantee fund that would give SMEs the much needed cover to look for borrowing and be accepted by the lenders themselves since SMEs are considered risky, a case that hurts their borrowing chances. Apart from funding, the government ought to come up with the right tools on their own or through a collaboration to help the small firms with tips on getting out of the deep end.
As the government gradually reopens the economy, there is a need to train traders through business associations and saccos, especially for public transporters, on the possible best practice to remain afloat and thrive post-Corona.