By James Murimi - Reporter
Kenya, June 27, 2026 - President William Ruto has challenged commercial banks and other private sector lenders to help close Kenya's estimated Sh3 trillion financing gap for micro, small and medium-sized enterprises (MSMEs), saying the country's economic transformation depends on bringing millions of entrepreneurs into the formal financial system.
Speaking during this year's World Micro, Small and Medium-sized Enterprises (MSME) Day at the Kenyatta International Convention Centre (KICC), where he launched the Revised MSME Policy 2026, the President said government resources alone cannot meet the financing needs of small businesses.
"Kenya's MSME financing gap stands at roughly Sh3 trillion. This challenge is not unique to Kenya. Government funds can catalyse and prepare our people for credit, but government alone cannot close our Sh3 trillion financing gap. The private sector must participate," Ruto said.
He noted that although commercial banks have advanced about Sh1 trillion in enterprise financing over the past three years, the vast majority of micro and small enterprises remain excluded from formal credit.
"The uncomfortable truth remains. The vast majority of micro and small enterprises, the very backbone of our economy, have remained outside this flow of capital. This is neither a complaint nor a lamentation. It is an invitation," he said.
The President called for what he described as an honest national conversation between the government, banks and the private sector on expanding access to finance.
"Today, I want to begin an honest conversation at the national level with the private sector on the central question of our economic future. How do we sustainably unlock financing for Kenyan MSMEs? That is the conversation we must have between government, our banks, the private sector and all those who believe in Kenya's future," he said.
Posing a direct challenge to financial institutions, Ruto asked: "How can we possibly grow our economy while locking most of our people off the balance sheet? How do we create jobs for our youth while refusing to bank them?"
The President defended the Hustler Fund, saying it had helped build a credit history for millions of Kenyans who previously lacked access to formal borrowing.
"If there is one major component that the Hustler Fund has done to the economy of Kenya, it has established a credit track record for borrowers. We now know we have two million borrowers who pay as they borrow, and therefore banks can pick up from there and take these borrowers to the next level," he said.
He urged banks to leverage the government's investment in financial inclusion by extending larger and more affordable loans to borrowers with proven repayment records.
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"A nation of innovators can do far much better. To our entrepreneurs, our bankers and our builders, I say this: this is our challenge and this is our responsibility. Let us be the generation that unlocked finance for Kenyan MSMEs and turned a nation of hustlers into a nation of entrepreneurs and industrialists," Ruto said.
The President also cited the Affordable Housing Programme as evidence of the government's efforts to create opportunities for small businesses, saying 72 product lines had been reserved for Jua Kali artisans.
"Through the Affordable Housing Programme alone, we have ring-fenced 72 products for our Jua Kali artisans, a Sh60 billion opportunity that has already created contracts for more than 33,000 of them," he said.
Referring to one of the beneficiaries, Ruto said he had met a small-scale entrepreneur supplying construction materials to the housing programme.
"Just here I met Ondieki, a man with a small company participating in our housing programme. He is supplying hinges and windows for the Mukuru project. Their contracts under affordable housing now run into billions of shillings. It has never happened before. This is the heavy lifting government has undertaken," he said.
However, the President maintained that government initiatives alone would not be enough.
"None of it will be enough until we break the one barrier that still stands on our MSMEs' back — access to affordable finance," he said.
Drawing inspiration from Bangladesh, Ruto cited Nobel Peace Prize winner Muhammad Yunus and the Grameen Bank as an example of how innovative lending models transformed access to credit.
"One man, one idea banked the unbankable. In my honest opinion, Kenya needs this kind of thinking," the President said.