{"id":4473,"date":"2019-08-09T09:55:31","date_gmt":"2019-08-09T06:55:31","guid":{"rendered":"https:\/\/africasustainabilitymatters.com\/?p=4473"},"modified":"2026-01-11T05:30:28","modified_gmt":"2026-01-11T05:30:28","slug":"are-pe-and-mezzanine-financing-answer-to-smes-funding-hurdle","status":"publish","type":"post","link":"https:\/\/rayscohosting.best\/ASM\/2019\/08\/09\/are-pe-and-mezzanine-financing-answer-to-smes-funding-hurdle\/","title":{"rendered":"Are PE And Mezzanine Financing The Answer To SMEs Funding Hurdle?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong><em>&nbsp;By ERIC MAGU<\/em><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The lack of access to finance is one of the most prevalent\nchallenges entrepreneurs and business owners face. Due to the interest rate\nregulation, Kenyan banks are now much more selective, preferring to focus their\nefforts and credit on larger corporates which have good borrowing standing and\nthe advantage to offer collaterals.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In September 2016, the\nbanking sector in Kenya started to operationalize the Banking (Amendment) Act\n2015. This law sought to set the maximum lending rate at no more than four\npercent above the Central Bank rate. With this regulation, banks became more\nrisk-averse towards borrowers since they could not charge higher rates to\ncompensate them for the additional risk they were taking.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The perception exists\namong many local banks that Small and Micro Enterprises (SMEs) have\ninsufficient assets or collateral, making them a riskier and therefore less\ndesirable proposition.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Banks fail to tailor\ndebt-service schedules according to a given business plan, and tenors are often\nvery short term, usually three years, which is not the type of patient capital\nsmall and medium sized companies need to grow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There is typically a\nmismatch between the debt structure and the entrepreneur\u2019s business plan. This\nlack of access to bank loans leaves the SMEs to the other available option of\nturning to private equity and venture capital for early stage and growth\ncapital\u2026<a href=\"https:\/\/www.businessdailyafrica.com\/analysis\/columnists\/PE-and-mezzanine-financing\/4259356-5228614-5h9ex8\/index.html\">Read\nmore&gt;&gt;<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp;By ERIC MAGU The lack of access to finance is one of the most prevalent challenges entrepreneurs and business owners face. Due to the interest rate regulation, Kenyan banks are&hellip;<\/p>\n","protected":false},"author":3,"featured_media":3190,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","pagelayer_contact_templates":[],"_pagelayer_content":"","_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[101],"tags":[],"class_list":["post-4473","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-international-news"],"_links":{"self":[{"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/posts\/4473","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/comments?post=4473"}],"version-history":[{"count":0,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/posts\/4473\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/media\/3190"}],"wp:attachment":[{"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/media?parent=4473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/categories?post=4473"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rayscohosting.best\/ASM\/wp-json\/wp\/v2\/tags?post=4473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}