State firms sign deal to assist small and medium enterprises
Lewis Njoka and Nicolas Waitathu
Five institutions involved in implementation of the recently launched small and medium enterprises (SMEs) fund have signed a memorandum of understanding (MoU) that will enable them to share information and resources in implementing the Sh4 billion Stawisha Mashinani programme.
Parties to the deal signed in Nairobi yesterday are Kenya Industrial Estates, Industrial and Commercial Development Corporation (ICDC), Micro and Small Enterprise Authority, Kenya National Trading Corporation and IDB Capital Ltd.
The five, all government agencies, entered into a three- year non-legally binding agreement allowing them to identify and co-finance projects as well as develop new financing instruments together.
They are charged with giving loans to SMEs which previously were unable to access credit due to lack of security.
Over 400 SMEs stand to benefit from the government loan facility to finance their businesses as well as exploit new business opportunities, for example, value addition.
The funds will be advanced to small traders at a rate of 10 per cent, starting in the current financial year.
Chief Administrative Secretary in the Industry, Trade and Co-operatives ministry Lawrence Karanja said the programme is designed to be a start-off for the small enterprises before they approach mainstream banks.
“This programme is meant to strengthen SMEs manufacturing ventures at the grass roots level and targeting to support them take up value addition of agricultural produce,” he added.
The money, Karanja said, will help such businesses and shield them against tribulations they face with mainstream banks.
President Uhuru Kenyatta launched Stawisha SME Mashinani, a national programme by Ministry of Industry, Trade and Enterprise Development, in Ol’Kalou Constituency, Nyandarua County last week.
The plan is fashioned as a one-stop-shop to provide business advisory, asset financing, working capital, and grants to SMEs.