Small enterprises tend to be more flexible in adjusting to changing times compared to large organisations. Small and medium-sized enterprises (SMEs) can, therefore, be powerful agents of positive change in the society, if accorded the right environment to thrive.
With the effects of climate change upon us, this army of enterprises can collectively lead the transition to a green economy through climate-friendly projects. The above observations were made by the CEO of Kenya Climate Innovation Centre (KCIC) Edward Mungai during a webinar convened by the Kenya Bankers Association.
“SMEs tend to be quite flexible in adapting to and shaping new innovations. The fact that they’re small in size, decisions and change can be made much faster,” Mungai said on Friday during the virtual meeting.
Mungai noted that a green drive can only be fuelled by innovative business models and technology, in the process creating more socioeconomic opportunities.
But challenges remain. The list includes capital access roadblocks, inadequate skills for executing a business plan, lack of information on intellectual property as well as infrastructure gaps and rigid policy frameworks.
On funding, Mungai shared with the participants in the meeting that KCIC is happy to fund innovative ideas in the green space.
“SME financing does not have to be plain vanilla financing. What banks currently provide is often plain vanilla – there’s always a checklist, three years of financial statement, who is your auditor, sales, staff number and the likes. Green financing should be approached differently,” said Mungai.
The bankers in attendance acknowledged the fact that that the local market is yet to design financing products tailored for green entrepreneurs.
“As a banking industry, there’s need for flexible green financing products, besides regular financing,” said Nuru Mugambi of Kenya Bankers Association.
KCIC, Mungai said, has a proof of concept fund targeting startups with up to Sh5 million in grants. It also has an early-stage financing product offered to enterprises under flexible repayment terms and affordable interest rate.
Besides funding, KCIC offers climate-friendly businesses incubation and acceleration services to scale.
“The soft money and advisory services we offer aim to empower Kenyan SMEs operating in the green space and unleash a green revolution,” said Mungai.
On intellectual property, Mungai said: “We work closely with World Intellectual Property Organisation (Wipo) and Kenya Industrial Property Institute (Kipi) to support people register their projects, so that nobody steals their ideas.”
KCIC has an incubation space at Strathmore University in Nairobi to accommodate startups as they fine-tune their ideas.
Lastly on the issue of policy and access to information Mungai said: “We work with the government as part of Vision 2030 – ministries of Environment and Energy to push these ideas to the next level, and work on the policy support side.”
“We also facilitate access to information – could be information on technology, or market access or available facilities,” he said.
Read also: How impact investing is promoting climate-friendly projects
