11th-Dec-2025 • Martin Mwangi • Financial Inclusion
Welcome to a new era of opportunity for small and medium enterprises (SMEs) in Kenya! The landscape is changing, with a growing focus on financial inclusion – providing equitable access to financial services. This inclusive approach can be a game-changer for businesses that have long faced obstacles in securing funding.
According to the World Bank, SMEs account for over 98% of all businesses in Kenya and contribute substantially to the country's GDP. Yet, they often struggle to access essential financial services, such as loans, insurance, and payment systems.
The challenge is not unique to Kenya; it is a widespread issue across Africa. However, with innovative solutions and forward-thinking initiatives, we can drive meaningful change.
One way to improve access to financing for Kenyan SMEs is by leveraging digital technology. Online lending platforms, like Lipabiz Technologies Ltd, use data analytics and machine learning to assess creditworthiness quickly and accurately. This helps reduce the reliance on traditional collateral requirements, making loans more accessible for a wider range of businesses.
Another area where Kenya is leading the way is mobile payments. M-Pesa, launched in 2007, was one of the first mobile money transfer services worldwide and has revolutionized how SMEs manage their finances. By adopting such systems, businesses can simplify transactions, increase efficiency, and reduce costs.
Insurance coverage is crucial for safeguarding SMEs against unforeseen circumstances. Yet, many small businesses in Kenya lack adequate insurance. To address this, insurtech companies are emerging, offering tailored and affordable insurance policies to meet the unique needs of SMEs.
To foster a more inclusive financial landscape, public-private partnerships play a vital role. Governments can create enabling environments by implementing regulations that promote financial inclusion and protecting consumers' rights. Meanwhile, businesses should commit to responsible lending practices and invest in digital solutions that cater to the needs of small business owners.
Financial inclusion is more than just access to services; it's about leveling the playing field for SMEs. By embracing innovative solutions and collaborative efforts, we can unlock the full potential of Kenya's small businesses – driving economic growth and creating a brighter future for all.