Government Urged to Transform Support for Small and Medium Enterprises

Officials from Unaitas Sacco, based in Murang’a, have called on the government to implement forward-thinking policies and initiatives to revitalize Small and Medium Enterprises (SMEs), particularly in rural Kenya.

James Muhoho, CEO of Unaitas Sacco, highlighted the high operational costs and challenges faced by SMEs, attributing these issues to increased taxes and the rising cost of living. According to Muhoho, these financial pressures have hindered the ability of small and medium businesses to thrive and have negatively impacted financial institutions, such as Saccos, that support them.

“Our members who took out loans to start their businesses are struggling to generate profits,” Muhoho stated during the launch of a new branch at Ndunyu Chege Market in Gatanga Sub County. “The increased taxes are partly responsible for this struggle. We urge the government to review and adjust its policies to better support small and medium enterprises.”

Muhoho emphasized the need for the government to develop strategies that assist lower-income Kenyans, enabling them to engage more effectively in profitable ventures. He pointed out that there is a noticeable decline in the number of new businesses being started, and those that do exist are experiencing sluggish activity. This trend has led to a rise in loan defaults as business owners grapple with financial instability.

In Murang’a, Muhoho commended the local administration for its efforts to bolster business and agricultural activities. He particularly praised the smart city initiative, which aims to enhance infrastructure and sanitation in local markets. This program has been beneficial for small-scale traders by improving their business environment.

Additionally, Muhoho acknowledged the impact of subsidies provided to dairy and mango farmers, which have led to increased production and income. He believes that such programs are essential for supporting grassroots economic activities. However, he also urged the county administration to appoint more extension officers to assist farmers with technical expertise, as many lack the necessary knowledge to optimize their agricultural output and engage effectively in agribusiness.

The newly inaugurated branch at Ndunyu Chege is expected to cater to a significant number of tea, coffee, dairy, and poultry farmers, facilitating easier access to financial services for these members. Unaitas Sacco, originally established in Murang’a, is one of the largest Saccos in the country, boasting an asset base of Sh23.6 billion and a loan portfolio of approximately Sh20 billion.

With over 400,000 members nationwide, Unaitas Sacco has accumulated deposits totaling Sh14 billion and generates annual profits exceeding Sh1 billion. The expansion of their services through the new branch is anticipated to further support and empower local entrepreneurs and farmers, enhancing the overall economic landscape in the region.