Study on start-up financing in Kenya
As part of its emerging bilateral partnership with Kenya, KfW is exploring the provision of finance to start-up/young businesses and entrepreneurs, aiming to address challenges related to employment, job creation, and economic growth. In this regard, KfW’s potential start-up financing activities would be a natural complement to its existing activities in the Kenyan vocational training sector.
KfW mandated IPC to carry out a market assessment and analyse the potential opportunity and feasibility of a new programme in support of start-up financing in Kenya. After the identification of any opportunity, KfW asked IPC to elaborate on the potential organisational set-up of a financing mechanism including the instruments offered.
To carry this out, IPC’s experts implemented the following tasks:
- identifying the needs, barriers, and market gaps in the financing of new/young businesses in Kenya
- quantifying the current and future potential demand for financing among new/young businesses
- identifying the current availability and structure of financing available to new/young businesses in Kenya
- assessing the availability and need for risk mitigation instruments (e.g., credit guarantee facilities)
- highlighting potential structures or instruments that could viably increase the access to finance for new/young businesses in Kenya
- developing a full operational concept for a potential KfW programme to support start-up financing in Kenya
- assessing the relevant legal, institutional and operational aspects of the potential programme concepts
- analysing the risks and opportunities associated with each approach as well as synergies with other donors and projects of German development co-operation