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Small traders wait for new SME fund

Informal traders in Nairobi are pushing the government to quicken the creation of the Micro and Small Enterprise Authority to help them formalise business and the setting up of a revolving fund.

The authority created by the Micro and Small Enterprises Act (MSE Act), which came into force in December 2012, is intended to transform small-businesses into key economic growth drivers.

“Since its establishment in February 2013, the authority is yet to be fully operational and has delayed benefits expected for the micro- and small-scale entrepreneurs,” said Simon ole Nasieku, the trustee Kenya National Street Vendors and Informal Traders, a body that largely represents small traders in Nairobi.

“It is now time for the Government to fund it so as to fully operationalise it.”

The implementation of the MSE Act will lift small and medium businesses and to get them to contribute to the tax revenue. If that does not happen, these businesses will remain static and delay lifting of millions out of poverty.

“We are perpetually being evicted without notice, arrested arbitrarily and lately a shoot to kill order has been issued against the hawkers. This needs to change and that’s why the authority must be empowered as soon as possible,” he claimed in an interview in Nairobi.

The delay has occasioned a drought of funding for youth, a group also targeted by affirmative procurement and the Uwezo fund.

It is meant to enable the people access finance at subsidised rates shielded from the volatile interest charged by commercial banks

“What the sector requires are specialised funds with insider knowledge of how it operates as borrowing from banks and micro-finance institutions is expensive,” said Juliet Wanjiru an African prints tailor at Kasarani Shopping Centre.


The authority is expected to work closely with more than 1,200 MSE associations to facilitate implementation of the new law that also sets up a registrar of MSEs.

Once fully operational, the authority would create a healthy business environment for the informal sectors, facilitate registration of the informal businesses, train and encourage entrepreneurship among the youths, promote formation of representative associations as well as administer the MSE fund.

It, with the help of the county governments, will also help MSEs lease stalls backed by law and use the same as collateral in banks.

The sector is the largest employer in Kenya, according to successive Economic Surveys, accounting for more than 80 per cent of new jobs every year.