Capital Markets

Banks to coach small business owners for safer lending

Bags vendor. FILE PHOTO | NMG
Bags vendor. FILE PHOTO | NMG 

Commercial banks are planning special investment training for small businesses which are currently squeezed for credit due to their high risk profile.

In a Sh100 million initiative the lenders, under the umbrella of the Kenyan Bankers Association (KBA), plan assistance to micro, small and medium-sized enterprises (MSMEs) on key issues such as book keeping and drafting of business proposals for funding.

“Several modules of the training are ready and will be tested with the user group over the next few weeks,” KBA director of communications and public affairs Nuru Mugambi said in an email response.

“Once the users, who are business owners and entrepreneurs, give us feedback we will roll out the face-to-face and online training.”

MSMEs have largely been subjected to high interest rates due to perceived higher risks than corporates partly because of poor book-keeping methods. They have been hardest hit by the rate cap regime with banks claiming the four per cent risk allowance does not fit in their profile.

The online platform will be accessible for free, Ms Mugambi said, adding that face-to-face training will be done in phases.

The first phase of the face-to-face training targeting enterprises in Nairobi and Nakuru is planned for between November and January next year.