A local private equity firm, Fusion Capital, is seeking Sh100 billion over the next five years to increase its funding to Small and Medium Enterprises in Kenya and across the region.
The private equity fund that finances Small and Medium Enterprises (SMEs) as well as start-ups will be looking to raise the money from private investors in Europe, Development Finance Institutions (DFIs), high network individuals and companies in Kenya to grow its financing muscle to the fast growing SME sector in Kenya.
According to Fusion Capital chief executive officer Luke Kinoti, this would boost the firm’s funding activities as it targets more firms in the East African countries, four of which – Kenya, Tanzania, Uganda and Rwanda – it has offices in.
This would help the firm to extend funding at less than 10 per cent interest in different sectors of the economy.
“Right now, we have 425 SMEs that we are financing to a tune of Sh15 billion. We are not only able to provide funding to any SME or start-up that is able to borrow from Sh1 million to Sh300 million but also help in strengthening their management or governance structures,” Mr Kinoti said, at the launch of the Fusion Business Club.
He said that the private equity firm is looking to raise Sh680 million ($8 million) between now and March next year to continue supporting SME operations.
In Kenya there are about 50,800 small and medium enterprises that employ between five and 49 workers.
Mr Kinoti further said that the firm has submitted its proposal to the Capital Markets Authority (CMA) to be allowed to list on the Nairobi Securities Exchange (NSE) in the near future.
Speaking at the same function, Ministry of Industrialisation assistant minister Ndiritu Muriithi said the government has put in place incentives like investment certificates that would allow them to recoup their investments before they are subjected to tax.
“If you invest Sh0.5 million or more, you should apply for an investment certificate that will allow you to recover 100 per cent of your investments before you start paying tax,” Mr Muriithi said.