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Kenya is preparing a groundbreaking policy that will require large corporations to dedicate a portion of their corporate social responsibility (CSR) budgets to financing startups and innovators. The move, spearheaded by the Kenya National Innovation Agency (KeNIA), represents a bold effort to strengthen the country’s innovation ecosystem and promote sustainable economic growth.
Under the proposal, KeNIA aims to establish a national framework that directs a percentage of corporate CSR spending into a government-managed innovation fund. This fund would be used to support early-stage startups that often face challenges accessing capital beyond the prototype or pilot phase.
KeNIA Chief Executive Tonny Omwansa
According to KeNIA Chief Executive, Tonny Omwansa, the initiative seeks to align corporate giving with national development priorities rather than individual company interests.
“We are exploring ways to engage the private sector through the CSR framework so that part of their budgets supports national innovation programmes,” Omwansa said in an interview with Business Daily. “Currently, most CSR spending goes to company-aligned projects rather than initiatives that drive national innovation and impact.”
Today, many of Kenya’s leading corporations — including Safaricom, Equity Group, and KCB — invest heavily in CSR activities focused on education, community welfare, and sports. However, some firms such as Safaricom and Britam have already started integrating startup support into their CSR portfolios, signaling a shift toward innovation-focused social investment.
KeNIA’s proposed policy draws inspiration from India’s Companies Act of 2013, which mandates large firms to allocate at least 2% of their average net profits over three years to CSR initiatives. In India, the requirement applies to companies with annual turnover above $112.6 million or net profits of at least $560,000.
Omwansa explained that Kenya’s startups operate in an unstable funding environment, relying mainly on grants and international investors. By linking CSR spending to innovation, Kenya could create a more consistent and locally anchored funding model for entrepreneurs. In 2024 alone, Kenyan startups raised $638 million in venture capital, reinforcing the nation’s status as a regional technology and innovation hub.
This CSR funding framework complements the KES 1.5 billion ($11.6 million) innovation seed fund announced by President William Ruto during the 2024 Kenya Innovation Week. Of this, KES 1 billion ($7.7 million) was allocated to startup financing, and KES 500 million ($3.8 million) to KeNIA’s operations.
KeNIA intends to triple this seed capital by mobilising contributions from the private sector under the proposed CSR mechanism.
“If we can attract an additional KES 4.5 billion ($34.8 million) from corporates, we will dramatically expand our ability to support startups nationwide,” Omwansa said.
If implemented, Kenya would become one of the first African countries to institutionalise CSR-backed startup funding. The initiative represents a paradigm shift from traditional charity-based CSR toward a development-driven model focused on innovation, entrepreneurship, and long-term economic sustainability.
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