NAIROBI, June 14 (Xinhua) -- Credit growth among Kenya's micro, small, and medium enterprises (MSMEs) was stifled in the two years to 2022 as the businesses grappled with the effects of the COVID-19 pandemic, the Central Bank of Kenya (CBK) said in a survey.
While there was a 27 percent increase in total active MSME loan accounts between 2020 and 2022, the cumulative rise in loan value during the period stood at 7 percent, the apex bank said in the survey released Tuesday.
"This was slow compared to the 42 percent increase in total active MSME loan accounts and 54.2 percent increase in the cumulative value of the MSME loan portfolio between 2017 and 2020," the CBK said.
As of December 2022, there were 1.18 million active MSME loan accounts in Kenya's banking sector valued at 783.3 billion shillings (about 5.61 billion U.S. dollars).
"The MSME credit growth remained relatively slow in 2022 in the wake of the COVID-19 pandemic, which triggered significant disruption, with MSMEs affected by the widespread impacts," the apex bank observed.
According to the CBK, many MSMEs have been able to continue with operations while suffering significant revenue challenges, resulting in severe liquidity shortages due to the pandemic.
Despite the challenges, the institutions have strived to repay their loans which were structured in 2020 and 2021 at the height of the pandemic.
According to the Kenya National Bureau of Statistics, there are more than 7 million MSMEs in Kenya, which employ more than 15 million Kenyans across all sectors of the economy.
These businesses contribute up to 33.8 percent to the national gross domestic product, according to official data, and they continue to play an important role in enhancing economic prosperity and social well-being. ■
