NAIROBI, Kenya Jun 27 – President William Ruto has challenged Kenya’s banking sector to increase lending to micro, small and medium enterprises (MSMEs), saying the sector remains underfunded despite being the backbone of the country’s economy.Speaking during this year’s World MSME Day celebrations at the Kenyatta International Convention Centre (KICC) in Nairobi, President Ruto said small businesses contribute nearly 40 per cent of Kenya’s economy but continue to face limited access to financing.Although commercial banks have extended about KSh1 trillion in credit to the sector over the last three years, the President said the amount remains insufficient to support the growth potential of MSMEs.“The uncomfortable truth remains: The vast majority of micro and small enterprises, the very backbone of our economy, have remained outside that flow of capital,” President Ruto said.He noted that the sector currently faces a financing gap estimated at KSh3 trillion and urged financial institutions to develop innovative and inclusive lending solutions.“I put it to my friends in finance plainly — how can we possibly grow our economy while locking most of our people off the balance sheet? How do we create jobs for our youth while refusing to bank them?” he posed.The Head of State highlighted several measures the government has introduced to support small businesses, including the establishment of a State Department dedicated to MSMEs.He also said the government has disbursed KSh90 billion through the Hustler Fund to more than 27 million Kenyans over the past three years.Additionally, the President revealed that more than eight million Kenyans who had been blacklisted by the Credit Reference Bureau (CRB) have been delisted, with two million already rebuilding their credit standing and rejoining the formal financial system.“We are now turning that credit history into a National Credit Score so that character and behaviour, not just a title deed or a logbook, can unlock financing,” he said.President Ruto further challenged local banks to emulate Bangladesh’s Grameen Bank, founded by Nobel Prize winner Muhammad Yunus, which has extended billions of dollars in microfinance loans to underserved communities.“The unbanked are not a risk to be kept at arm’s length. They are a market waiting to be served,” he said.The event was attended by Cooperatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya, United Nations Resident Coordinator Garry Conille, Nairobi Governor Johnson Sakaja, principal secretaries, MPs and hundreds of entrepreneurs from across the country.Speaking during the event, Oparanya said the Revised MSMEs Policy 2026 launched by President Ruto will help remove barriers facing entrepreneurs and improve the ease of doing business.Governor Sakaja also said Nairobi County’s Unified Business Permit system has reduced bureaucracy and streamlined the issuance of business permits within the capital city.