Kenya Threshold Program II - Constraints Analysis

MCC’s evidence-based approach to its investments begins with a mutual understanding of a country’s main growth challenges. During the first phase of the compact or threshold program development process, MCC and the selected partner country, jointly conduct a constraints-to-growth analysis (CA). This analysis identifies the constraints to private investment and entrepreneurship that are most binding to economic growth in the country. The results of this analysis enable the country, together with MCC, to select activities most likely to contribute to sustainable, poverty-reducing growth.

The Constraints Analysis Report for the second Kenya Threshold Program highlights the following binding constraints to economic growth:

1. Crowding out that limits financing to the private sector, particularly to micro, small and medium enterprises (MSMEs), and
2. Limited connectivity that undermines productivity in urban areas, the engines of Kenya’s economy.