NAIROBI, KENYA – The government has unveiled a KSh 15 billion fund aimed at providing affordable credit and digital skills training to half a million micro, small, and medium-sized enterprises (MSMEs) across Kenya. The announcement was made on Friday, November 7, 2025, by the Principal Secretary for the State Department for MSMEs Development, Susan Mang'eni, during a launch event in Nairobi.

The initiative, named the 'Jenga Biashara Fund,' is designed to directly address the persistent challenges of high-cost credit and the widening digital skills gap, which have long hindered the growth of the sector. According to PS Mang'eni, the fund will be disbursed over the next three fiscal years.

"MSMEs are the undeniable backbone of our economy, but for too long, their potential has been stifled by a lack of accessible and affordable finance," Mang'eni stated at the Kenya International Convention Centre (KICC). "The Jenga Biashara Fund is a targeted intervention designed to not only inject much-needed capital but also to equip our entrepreneurs with the digital tools necessary to compete in the modern economy."

Fund Mechanics and Digital Integration

The fund will offer loans at a single-digit interest rate, a significant reduction from the average commercial bank lending rates which hovered between 15% and 16% for much of 2025. Applications will be managed through a centralized digital portal, developed in partnership with local fintech firms, to ensure transparency and efficiency. The portal is expected to go live on December 1, 2025.

A core component of the initiative is a mandatory digital literacy program for all beneficiaries. This training will cover e-commerce, digital marketing, cybersecurity, and the use of online government services, such as the e-Government Procurement portal. This emphasis on technology aligns with Mang'eni's consistent push for MSMEs to adopt digital solutions to enhance their competitiveness.

Economic Imperative

The MSME sector is a vital component of Kenya's economy, contributing approximately 40% of the Gross Domestic Product (GDP) and employing over 14 million Kenyans, a majority of whom are youth and women. However, the sector has faced significant headwinds in recent years, including the economic fallout from the pandemic, rising operational costs, and a harsh tax environment. A 2025 report from the Kenya Association of Manufacturers (KAM) highlighted that limited access to affordable credit remains a primary barrier to growth for small businesses.

Dr. Samuel Otieno, an economist at the University of Nairobi, commented on the launch. "In principle, a dedicated, low-interest fund is precisely what the MSME sector needs. The challenge, as always, will be in the execution. The government must ensure the allocation process is transparent, free from political influence, and reaches the intended businesses in a timely manner."

Lessons from Past Initiatives

This is not the first time the government has launched a state-backed fund to support small businesses. Previous initiatives, including the Uwezo Fund, Youth Enterprise Development Fund, and the more recent Hustler Fund, have met with mixed success. While these funds have disbursed billions of shillings, critics point to challenges in loan recovery, scalability, and ensuring long-term business survival.

The State Department for MSMEs has stated that the Jenga Biashara Fund incorporates lessons from these past programs. Key differences include the integrated skills development component and a robust partnership model with SACCOs and established financial institutions for last-mile disbursement and follow-up.

Reacting to the news, the Kenya National Chamber of Commerce and Industry (KNCCI) issued a statement of cautious optimism. "We welcome the Jenga Biashara Fund and the government's focus on the MSME sector. The emphasis on digital skills is particularly forward-thinking. We will be monitoring the implementation closely and offer our partnership to ensure its success, as the prosperity of our members and the broader economy depends on it."

As the fund prepares for its rollout, the nation's entrepreneurs will be watching closely, hopeful that this initiative will provide the catalyst needed to not only survive the challenging economic climate but to build resilient and thriving enterprises for the future.