Ruto Proposes Shifting CSR Funds to Boost Kenyan Startups
President William Ruto has proposed a significant shift in corporate social responsibility (CSR) funding in Kenya. The Kenya National Innovation Agency (KeNIA) is drafting a policy to redirect a portion of companies' CSR budgets towards an innovation fund supporting early-stage ventures.
Ruto announced a KES 1.5 billion ($11.6 million) innovation seed fund during the 2024 Kenya Innovation Week, with KES 1 billion earmarked for startup financing. KeNIA aims to attract at least KES 4.5 billion ($34.8 million) from private sector contributions through the CSR framework to support startups.
Currently, most CSR spending in Kenya aligns with company interests rather than broader national priorities. The proposed policy seeks to channel a percentage of these CSR allocations into the innovation fund, potentially facing resistance from companies involved in social and community development projects through CSR activities.
If implemented, Kenya would become one of the first African countries to direct CSR resources towards startup financing. This move aims to address the unpredictable funding environment faced by Kenyan startups, which currently rely heavily on grants and external sources for support. The policy borrows from India's Companies Act of 2013, which mandates large firms to allocate at least 2% of their net profits to CSR initiatives over three years.
