24th-Feb-2026 • Alice Wambui • Investment and Funding
Small and Medium Enterprises (SMEs) in Kenya play a vital role in the economy, contributing significantly to GDP and employment. However, accessing funding remains one of the most pressing challenges for these businesses. This article offers actionable insights into securing investment and funding for SMEs in Kenya.
According to a report by the Kenya National Bureau of Statistics (KNBS), only 12% of Kenyan SMEs have access to formal credit. To bridge this gap, it's crucial to explore various funding avenues.
Start by using your savings or revenues from initial operations (also known as bootstrapping). This strategy allows you to maintain control over your business and build a solid foundation before seeking external funding.
Kenya has several government-backed initiatives designed to support SMEs. For example, the Youth Enterprise Development Fund (YEDF) offers affordable loans and business training to young entrepreneurs.
Participating in business plan competitions can help you secure funding, network with investors, and gain valuable feedback on your business idea. The Strathmore Business Plan Competition is a renowned event in Kenya.
Crowdfunding platforms like M-Changa and Kiva allow you to raise funds from a large number of people, usually in small amounts. This approach can be particularly effective for projects with high visibility or emotional appeal.
Joining angel investor groups like Nairobi Angels and Eastern Africa Investment Fund can provide access to capital, mentorship, and industry connections. Ensure your business proposal is compelling and well-prepared.
For growth-stage SMEs, venture capital firms like Savannah Fund and 88mph can offer substantial funding. However, competition is fierce, so make sure your business demonstrates potential for scalability and profitability.
