26th-Oct-2025 • Martin Mwangi • Investment and Funding
Small and Medium Enterprises (SMEs) in Kenya play a pivotal role in the economy. According to the Kenya National Bureau of Statistics, SMEs account for approximately 98% of all businesses and contribute around 40% to the country's GDP. However, accessing suitable investment and funding options remains a significant challenge for many SME owners.
Understanding the landscape is crucial for success. Here are some practical strategies that Kenyan SME owners can employ to secure the necessary funding to propel their businesses forward:
Local banks offer various loan products tailored to SMEs, including overdraft facilities, business loans, and credit guarantees. The Kenya Bankers Association (KBA) launched the SME Credit Guarantee Scheme to assist businesses with collateral-based financing challenges.
The government offers numerous grants to support SME development, such as the Youth Enterprise Development Fund (YEDF) and Women Enterprise Fund (WEF). These initiatives provide affordable capital to start or grow a business.
Venture capital firms invest in high-growth potential businesses, often providing more than just financial support. They offer strategic advice and industry connections that can help SMEs scale up.
Crowdfunding platforms enable businesses to raise funds from a large number of people, typically via the internet. M-Changa is a popular Kenyan platform that has facilitated the collection of millions in donations for various causes, including business initiatives.
Peer-to-peer lending platforms connect borrowers with individual investors seeking higher returns on their investments. Examples include Branch and M-Shwari, which offer short-term loans to SMEs.
Regardless of the funding source chosen, maintaining robust financial management is essential. This includes keeping accurate records, preparing realistic cash flow projections, and demonstrating a clear understanding of your business's financial position.