Monday, April 22, 2024 – Treasury Cabinet Secretary Njuguna Ndung'u has come up with a way to help risky borrowers access funds again even after being listed on Credit Reference Bureau (CRB).
In a statement yesterday, Ndung’u announced a plan to fully introduce and implement the Credit Guarantee Policy.
Through this, Kenyans in Micro Small, and Medium Enterprises (MSMEs) will have an easier time accessing loans from different lenders.
According to CS, the lack of these guarantors blocks countless business owners from accessing loans that would boost their businesses.
He noted that other countries have such policies which have contributed to economic growth and the growth in MSMEs. Ndung'u revealed that some lenders see MSMEs as high-risk borrowers and therefore tend to deny them loans.
He emphasised that MSMEs face an array of challenges that stunt their growth. This coupled with a lack of funding resulted in delayed payments for suppliers.
The CS further explained that when implemented, Credit Guarantors will need to be registered as per the Companies Act and anyone who operates without a license risks a Ksh1 million fine or a three-year sentence, or both.
He also revealed that Kenya had established a Credit Guarantee Scheme in 2020 but this pilot is not suitable since it operates as a unit under the National Treasury and relies on annual budgetary allocation from the exchequer.
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