22nd-Dec-2025 • Alice Wambui • SME Funding Options
Small and Medium Enterprises (SMEs) form the backbone of Kenya’s economy. However, access to finance remains a challenge for many entrepreneurs. To help you navigate this landscape, we have compiled a list of funding options that can propel your SME towards success.
Banks offer long-term business loans with competitive interest rates, making them an attractive option for SMEs seeking large capital injections. For example, the Central Bank of Kenya's Guaranteed Small and Medium Enterprises Credit Scheme (SMECT) offers collateral-free loans to qualifying businesses.
Microfinance institutions provide alternative financing options for SMEs, particularly those that are not eligible for traditional bank loans. These institutions offer smaller loan amounts and cater to various sectors.
Peer-to-peer lending platforms connect investors with borrowers, offering SMEs access to funds through multiple funding sources. One such platform is M-Shwari, a mobile banking service backed by Equity Bank that allows users to borrow money and save.
The Kenyan government offers grants to SMEs through various agencies, including the Industrialization and Enterprise Development (IED) department and the Kenya National Chamber of Commerce and Industry (KNCCI). These grants often target specific sectors or regions in need of development.
Crowdfunding platforms enable SMEs to raise capital from a large number of people, typically via the internet. Some popular crowdfunding platforms in Kenya include M-Changa and Fundo, offering flexible funding options for businesses.
Venture capitalists provide capital to high-growth SMEs in exchange for an equity stake. If your business has the potential for rapid expansion, seeking venture capital could be a worthwhile pursuit. Some notable Kenyan venture capital firms include Savannah Fund and 88mph.
Investigating these funding options is crucial to your SME's growth and development. By exploring various financing opportunities, you can find the perfect fit for your business needs and secure the resources necessary to achieve long-term success.