21st-Dec-2025 • Isaac Kennedy • SME Funding Options
Small and Medium Enterprises (SMEs) form the backbone of Kenya's economy, contributing significantly to GDP growth and employment. However, accessing capital remains a perennial challenge for many SME owners. This article unveils a rich palette of funding options that can help your SME thrive in Kenya.
Traditional bank loans continue to be the most popular funding option for SMEs. Banks such as Equity Bank, KCB Group, and Standard Chartered Bank offer various loan products catering to different business needs.
For instance, Equity Bank's Equity SME Business Loan offers competitive interest rates and flexible repayment terms for businesses with a minimum turnover of KES 10 million per annum. The bank also provides digital banking solutions that simplify loan applications and repayments.
Microfinance institutions like Faulu, M-Kesh, and Ukwala provide short-term loans to SMEs, often with less stringent credit requirements compared to banks. They also offer group lending schemes, which can be beneficial for cooperatives and associations.
If your business is high-growth and innovative, venture capital (VC) firms and angel investors might be interested in partnering with you. Firms like Savannah Fund and 88mph invest in tech startups across Kenya.
The Kenyan government offers various grants to SMEs under the Youth Enterprise Development Fund (YEDF) and Women Enterprise Fund (WEF). These funds provide capital, business training, and mentorship to young and women entrepreneurs.
Crowdfunding platforms like M-Changa and GoGetFunding enable businesses to raise funds from the public through online campaigns. This can be an effective option for businesses with a strong social media presence or compelling story.