The “Listed SME Debt Fund,” spearheaded by FSD Africa—a development finance institution supported by the UK government—aims to mobilize KSH 38.85 billion ($300 million) to bolster local businesses and drive economic growth.

This fund seeks to attract both local and international investors to Kenya’s SME sector, supporting job creation and fostering economic development.

Kenyan SMEs often struggle with interest rates as high as 40%, significantly hindering their growth.
The new fund will address this challenge by providing affordable credit, reducing borrowing costs, and enabling a diverse range of businesses to thrive.
Locally listed and managed, the fund will also encourage investments from Kenyan pension funds and institutional investors, ensuring benefits for both portfolios and the broader economy.
The fund’s first round of fundraising aims to raise $100 million, with $240 million targeted from Kenyan institutional investors and $60 million from international backers.

It is expected to support 10,000 SMEs, impact 50,000 households, and create close to 90,000 jobs. With its broad sectoral focus—ranging from agriculture to technology—the fund will lower capital costs for entrepreneurs across industries.

Neil Wigan, British High Commissioner to Kenya, highlighted the fund’s inclusive approach, emphasizing its potential to empower young people, women, and persons with disabilities—groups often excluded from traditional financial systems.

“This initiative aims to uplift the hardworking hustlers of Kenya by making credit more accessible and affordable,” Wigan said.

Kenyan pension funds, which collectively manage over $30 billion in assets, have historically underutilized alternative investment opportunities.
FSD Africa’s Listed SME Debt Fund offers these institutions a new avenue to diversify portfolios, ensuring stable returns while mitigating risks associated with SME lending.
Mark Napier, CEO of FSD Africa, underscored the critical role SMEs play in Kenya’s economy, noting that they constitute 98% of businesses and significantly contribute to employment.

Expanding access to credit, he stated, is key to enabling these enterprises to grow, create jobs, and compete globally.

“This fund will unlock opportunities for SMEs to thrive locally and expand internationally,” Napier remarked.

The Listed SME Debt Fund is set to play a pivotal role in strengthening Kenya’s economic resilience by bridging the financing gap for SMEs and fostering inclusive growth.