State plans to merge women, youth funds into an SME bank

Trade PS Julius Korir says the in­ten­tion of form­ing the Bi­ashara Bank is to pro­vide credit guar­an­tees for mi­cro and small-sized busi­nesses to give them a fi­nan­cial foot­print

The Star (Kenya) - - News Business - CYN­THIA ILAKO @TheS­tarKenya

Star­tups, mi­cro, small and medium-sized en­ter­prises will in the near fu­ture be fa­cil­i­tated by the state to ac­cess funds, man­age­ment skills and mar­kets.

The plan, spear­headed by the Trade and In­dus­try min­istry, will see tar­geted en­ter­prise funds spon­sored by the state amal­ga­mated into a large de­vel­op­ment fund called Bi­ashara Bank.

“We have sev­eral in­stru­ments within the gov­ern­ment to en­able MSMEs to grow and be com­pet­i­tive,” Trade and In­dus­try PS Julius Korir said. “In the near fu­ture most of these agen­cies will be amal­ga­mated into one to form the Bi­ashara Bank which will now tar­get the small en­ter­prises.”

They in­clude the Youth En­ter­prise Fund, Women En­ter­prise Fund, the Sh6 bil­lion Uwezo Fund and other fa­cil­i­ta­tion through Kenya In­dus­trial Es­tates and In­dus­trial and Com­mer­cial De­vel­op­ment Cor­po­ra­tion.

Trea­sury Cab­i­net Sec­re­tary Henry Rotich on Tues­day said there is need for new leg­is­la­tion for the pro­posed MSME de­vel­op­ment fund to achieve set goals.

“It has worked suc­cess­fully in oth- er coun­tries in­clud­ing the UK and the US,” Rotich said. “We are work­ing on leg­is­la­tion which ties this to­gether so that once you open a busi­ness as an SME, you have a spe­cial ac­cess to fi­nance and at the same time you have ac­cess to gov­ern­ment sup­ply.”

A re­port by the Kenya Na­tional Bureau of Statis­tics, pub­lished on Oc­to­ber 24, put the value of the MSME to the econ­omy at an es­ti­mated Sh3.37 tril­lion against a na­tional out­put of Sh9.97 tril­lion in 2015, a 33.8 per cent share.

Korir said the in­ten­tion is to pro­vide credit guar­an­tees for mi­cro and small-sized busi­nesses to help them have a fi­nan­cial foot­print.

This will be in line with a study re­leased on May 29, 2014, by the Na­tional Eco­nomic and So­cial Coun­cil, a pow­er­ful pres­i­den­tial pol­icy think­tank dur­ing for­mer Pres­i­dent Kibaki’s ten­ure. The study rec­om­mended pol­icy and le­gal frame­work for guar­an­tee schemes at na­tional and county level to sup­port growth of the dom­i­nant MSMEs en­ter­prises.

“We want all schemes to be reg­u­lated through one body and there’s that huge fund in gov­ern­ment that guar­an­tees banks to lend to MSMES so they can cre­ate em­ploy­ment and al­le­vi­ate poverty,” for­mer NESC ex­ec­u­tive sec­re­tary Julius Muia, now Vi­sion 2030 di­rec­tor-gen­eral, had said.


Ge­orge Onyango with fel­low jua kali ar­ti­sans at his Ka­mukunji work­shop, Nairobi, on July 19

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