Investing in Young Business in Africa–Supporting Entrepreneurship Ecosystem Development - TEI IYBA-SEED programme for Start-Ups and MSMEs in Kenya

Driving inclusive economic growth

The Government of Kenya has made significant progress in promoting Micro, Small, and Medium Enterprises (MSMEs) through policies and initiatives such as Kenya Vision 2030 and the Kenya Industrial Estates programme under the Ministry of Cooperatives and Micro, Small and Medium Development. These efforts, along with targeted programmes for youth and women-led businesses, have improved access to finance and Business Development Services (BDS). However, many MSMEs still face major challenges that limit their growth. Despite Kenya’s strong financial sector, recognised as East Africa’s financial hub, access to finance for new ventures remains a hurdle. The problem is not only limited funding but also a lack of tailored financial products, weak linkages between Financial Service Providers (FSPs) and MSMEs, and limited capacity on both sides to meet each other’s needs. Youth and women entrepreneurs are particularly affected due to factors such as high-risk aversion from financiers, lack of collateral, limited financial literacy, and gender bias.

The Investing in Young Businesses in Africa - Supporting Entrepreneurship Ecosystem Development (TEI IYBA-SEED) programme is a Team Europe Initiative implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), to help young businesses and entrepreneurs in Africa, especially women, to launch, consolidate and grow sustainable, strong and inclusive businesses and create decent jobs. The initiative involves collaboration between various European and African partners, including the European Investment Bank, African Development Bank, and local financial institutions.

In Kenya, the programme focuses on several key interventions to support young businesses. These include awareness creation for new financial services, design and implementation of loan application toolkits, capacity building for financial literacy programmes, and facilitation of networking and knowledge sharing among financial ecosystem actors. The programme also aims to develop the capacity of BDS providers to comply with certification and regulatory requirements. By addressing these areas, the TEI IYBA-SEED programme aims to create a more conducive environment for young entrepreneurs to thrive and contribute to the country's economic growth.

It is within the scope of this programme that German Sparkassenstiftung (DSIK), in consortium with ICON Institut, are implementing a consultancy assignment on behalf of GIZ since March 2025, aimed at enhancing the entrepreneurship ecosystem for startups and MSMEs in Kenya, with a particular focus on women-led businesses. This assignment is scheduled to run until November 2026.

The consortium will undertake several key tasks aimed at enhancing the entrepreneurship ecosystem for startups and MSMEs in Kenya. The consortium will create awareness for new financial services tailored to SEED beneficiaries, design and implement loan application toolkits, and build the capacity of the Actors of the Entrepreneurship Ecosystem (AoEEs) to deliver financial literacy programmes. Additionally, the consortium will facilitate networking and knowledge sharing among financial ecosystem actors, develop the capacity of BDS providers to comply with certification and regulatory requirements, and support AoEEs in providing market platforms for SEED entrepreneurs to showcase their products.

By connecting entrepreneurs with the right tools, knowledge, and financing options, the TEI IYBA–SEED programme seeks to unlock the full potential of start-ups and MSMEs in Kenya, with a strong focus on youth and women-led enterprises.