The World Bank, IFC, European Investment bank and the AfDB are expected to provide technical expertise.
They may also contribute funds on top of the Sh3 billion seed capital that the National Treasury has set aside to cushion banks that lend directly to SMEs.
The package is expected to mitigate the impact of the pandemic to sustain the economy and avoid further job losses.
The Central Bank of Kenya (CBK) has reached out to four international lenders in its effort to craft a credit guarantee scheme to help small and medium enterprises (SMEs) survive the coronavirus crisis.
The institutions involved in the credit guarantee scheme include the World Bank, International Finance Corporation, European Investment bank and the African Development Bank.
The four international financiers are expected to provide technical expertise and may contribute funds on top of the Sh3 billion seed capital that the National Treasury has set aside to cushion banks that lend directly to SMEs.
The package is expected to mitigate the impact of the pandemic to sustain the economy and avoid further job losses.
“SMEs are likely to die if left unattended and we can’t wait to post Covid-19.
“We need to start working with them now,” said CBK Governor Patrick Njoroge.
“The institutions have experience on guarantee schemes and we looking to create something right-sized and quick because time is of the essence.”
Restaurants, bars and retail stores are already struggling with a decline in customer demand, repayment of bank loans, rent and utility bills, amid worries of a spike in non-performing loans under the sector.
Most of the businesses, especially those in manufacturing and export activities, have also reported laying off workers due to financial difficulties.
A new survey by Kenya Private Sector Alliance showed the majority of enterprises in all sectors and company sizes representing 81 percent have been impacted by Covid-19.
The survey also showed that agriculture, tourism, manufacturing and transport, which are among the largest gross domestic product contributors, reported average losses of between Sh20 million to Sh40 million per company.
“This is especially unsettling in the tourism and transport sectors where the majority of respondents are micro- and small firms,” the report added. Dr Njoroge remarks on the guarantee scheme package for the sector comes days after the World Bank has approved a Sh107 billion ($1 billion) loan for budgetary support as the country tackles economic shocks arising from the coronavirus pandemic.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
