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Current trends in the Financial Assistance
Small and medium enterprises (SMEs) were never valued by the country’s financial sector for a long time because they were considered too risky. But slowly, the perception has changed and they are becoming the darling of the banks, which have designed loan products to suit their financial needs. For instance, since the turn of this year four banks, Equity Bank, ABC Bank, Consolidated Bank and I&M Bank, have signed agreements with international institutions to finance SMEs.
This is largely because SMEs have not only proved to be viable economic ventures, but also play a critical role in the country’s economy. According to the Kenya Economic Survey 2011, of the 503,000 jobs created in 2010, 80.6 per cent, or 440,400, were in the SMEs sector.  

Banks are lending money at interest rates ranging from between 5 and 12 per cent depending on the risk factor of a particular SME. ABC Bank and Consolidated Bank who received Sh770 million and Sh715 million respectively from European Investment Bank (EIB). are targeting SMEs in the most critical sectors of the economy: agro-industry, fishing, food processing, manufacturing, transport, construction, private education, healthcare and services related to these sectors. SMEs exporting customers will benefit from this facility, through the multi-currency long-term lending opportunities, cushioning them from currency fluctuations

Banks are funding businesses which otherwise may have faced challenges with access to funds, which is good news for the SMEs who are paying high interest rates.
 
 
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