The programme will provide relief to micro, small and medium enterprises (MSMEs), with Cardno providing support to its implementation in Kenya. Among the tragic loss of life and disruption to normal society globally, the economic effects of the disease are set to provide different challenges. Cardno East Africa are based in Nairobi, and have decades of experience working within Kenya and the business structures locally, so are very well placed to provide effective and substantive aid.
Due to the current guidelines around social distancing to prevent the spread of COVID-19, and consequential work from home policies, the programme will incorporate technologically based end-to-end management of the fund. The fund application, application filtering, disbursement, and monitoring process will all be facilitated through a technology-based platform.
The severity of the economic impact will be borne disproportionately by economically vulnerable people in Africa and worldwide. Unchecked, the pandemic could erode hard earned development gains and threaten global stability.
The programme will support MSMEs through credit instruments with a focus on enterprises owned by, or largely impacting, young women and young men. It aims to address business challenges that have been brought by the restrictions relating to the outbreak of the COVID-19 disease. Challenges wrought by the pandemic are broad and include health and safety of workers, suppliers and customers, supply chain disruptions and budget reduction. This programme will mainly focus on liquidity challenges which include reduced cash positions and lack of access to additional credit brought on or exacerbated by the crisis.
The finance facility for the businesses is envisaged in the form of a short-term concessional loan which may include sub-commercial interest rates and grace periods on loan repayments. The funds will assist businesses to pivot operations in view of effects of COVID-19 on its operations. The loans will be disbursed through a micro finance institution (MFI) with a proven digital platform that has access to thousands of micro-enterprises.
To assist in the development of deal flow, local partner organisations will be engaged to identify and screen potential beneficiaries. Priority sectors include agriculture, retail, healthcare, and manufacturing with a particular focus on digital growth. The team will work closely with the Kenya National Chamber of Commerce and Industry (KNCCI), the Kenya Private Sector Alliance (KEPSA) and Women Work Network membership organisations to manage a robust pipeline for the loan facility.
An investment committee will make decisions on applications received and will include representatives from the partner organisations, the MasterCard Foundation, GBF and Cardno. The targeted businesses will also benefit from tailored technical assistance to enable them navigate through prevailing market disruptions through knowledge sharing and coaching via online and virtual delivery.
It is estimated that through this programme, thousands of micro, small and medium enterprises sourced through partners – KEPSA, KNCCI and Women Work Network will be assisted to preserve income for thousands of workers, and support tens of thousands of families in Kenya.