President William Ruto has called on commercial banks to expand credit access for micro, small, and medium enterprises (MSMEs), warning that limited financing continues to stifle growth in one of Kenya’s most vital economic sectors.
Speaking at the World MSME Day celebrations held at the Kenyatta International Convention Centre (KICC) in Nairobi, the President emphasized that although MSMEs contribute nearly 40 percent of Kenya’s GDP, many remain excluded from formal financial systems.
Ruto noted that banks have extended about Ksh.1 trillion in loans to the sector over the past three years, but described this as insufficient compared to the actual needs of small businesses. He highlighted a financing gap of approximately Ksh.3 trillion, urging financial institutions to adopt innovative lending models tailored to entrepreneurs.
“The uncomfortable truth is that most micro and small enterprises, the backbone of our economy, remain outside the flow of capital,” he said. “We cannot grow our economy while locking out the majority of our people from the balance sheet.”
The President outlined several government initiatives aimed at strengthening MSMEs, including the creation of a dedicated State Department. He revealed that the Hustler Fund has disbursed Ksh.90 billion to more than 27 million Kenyans in the past three years. Additionally, over eight million individuals have been removed from the Credit Reference Bureau (CRB) blacklist, with two million already rebuilding their credit profiles.
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Ruto announced plans to introduce a National Credit Score system, designed to allow borrowers’ character and repayment behavior to determine access to financing, rather than traditional collateral such as land titles or logbooks. He encouraged local banks to draw inspiration from Bangladesh’s Grameen Bank, which has successfully provided unsecured loans to millions of low-income borrowers.
“The unbanked are not a risk to be avoided; they represent a market waiting to be served,” he stressed.
United Nations Resident Coordinator Garry Conille praised Kenya’s efforts, noting that financial inclusion is critical for economic transformation. “This is not charity. It is about ensuring that no Kenyan with ambition is invisible to the economy,” he remarked.
Co-operatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya added that the newly launched Revised MSMEs Policy 2026 will help dismantle barriers that have long hindered business growth. Nairobi Governor Johnson Sakaja also highlighted the county’s Unified Business Permit, which has streamlined licensing and reduced bureaucracy for entrepreneurs.
By Masaki Enock
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