Key questions this article answers:
  1. What sources do Kenya micro and small enterprises (MSEs) use to finance their businesses?
  2. Have mobile money loans in the East African country improved MSE’s access to finance?

Kenyan micro and small enterprises (MSEs) need a boost to keep the lights on.
49% of small firms face barriers to accessing finance, more than the African average of 40%.

The past three years have been especially rough between the COVID-19 lockdowns, supply shocks from the Russian-Ukrainian war, and rising living costs. A year-long study of Kenyan small businesses found that two-thirds of small firms’ employees went without food at some point during the year.

It’s no wonder President William Ruto aptly named his $410 million loan scheme for low-income Kenyans and small businesses ‘the Hustler Fund’. The former chicken seller-turned President likely gets the plight of Kenya’s tenacious micro-entrepreneurs more than most.

Kenya’s micro and small enterprises (MSEs) contribute 24% to the gross domestic product and 93% of the labour force. With their economic might, MSEs aren’t a group to be trifled with, but formal financial institutions underserve them.