Kenya is exploring ways to tap into corporate Social responsibility (CSR) funds raised by large companies to support startups and innovators, borrowing from models in India.
Tonny Omwansa, Chief Executive at Kenya National Innovation Agency (KeNIA), said the agency has begun drafting a proposal for the government to establish a framework that would channel a small percentage of CSR budgets into a national innovation fund.
The concept largely borrows from India, which runs a model that requires large companies to spend a portion of their profits on CSR, with funds often channelled into national programmes, including innovation and entrepreneurship support.
India’s Companies Act 2013 requires firms that meet certain criteria, such as turnover of more than 10 billion Indian rupees (about Sh14.57 billion) and profit of at least 50 million rupees (about Sh72.85 million), to spend a minimum of two percent of their net profit in three years on CSR activities.
The agency said Kenya’s innovators and startups face the perennial challenge of unpredictable funding cycles, often tied to donor support or Treasury allocations, with the majority of them struggling to get past early-stage financing— technically called the “valley of death” in innovation circles.
Dr Omwansa says while some of Kenya’s corporates spend heavily on CSR initiatives, most of that funding is channelled into projects aligned to the firms’ own interests, rather than broader national priorities.
“The avenue we are beginning to explore is how to engage with the private sector in the CSR framework to get a percentage of the resources, so that then we bring it to the table and design programmes that benefit even the most marginalised. That way we diffuse these resources as much as possible to beneficiaries who would never have benefited if the resources were going directly to the programmes that the organisations are trying to do,” he said.
“We have identified the framework in India that is leveraging CSR funding. When the private sector contributes money as CSR, a percentage of that goes to the innovation agency to then support the broader ecosystem.”
Alongside the CSR push, KeNIA is also working to leverage a Sh1.5 billion seed fund announced by President William Ruto during the annual innovation week in November 2024— Sh1 billion for the startup fund and Sh500 million for agency operations.
The proposal is still at the drafting stage, but KeNIA hopes it will spark a policy shift that ensures CSR resources contribute directly to building a national innovation pipeline.
“We plan to raise three times as much from the private sector by showing them we are building startup pipelines they can tap into,” the KeNIA boss said. “If we succeed in mobilising another Sh4.5 billion on top of the government allocation, that will significantly scale our capacity.”
Kenya has long come under sharp focus for underfunding innovation, with many university laboratories producing groundbreaking prototypes that fail to make it to market.
The absence of early-stage financing has been cited as the main reason why many inventions are left stuck at the prototype stage.
