Proposed bank to cater for start-ups

Kenya is moving to create a business fund that will see Small and Medium Sized Enterprises (SMEs) access long-term cheap capital to acquire equipment and produce goods for export.

Treasury Cabinet Secretary Henry Rotich said the proposed Biashara Bank will merge the Youth Enterprise Development Fund, Women Enterprise Fund and Uwezo Fund to cut costs.

“The three funds are not neatly tied together. Their consolidation will trigger a bigger wave of entrepreneurship and jobs creation,” the CS said in an interview.

“We are looking at something like the United States Small Business Act,” he added.

The US legislation provides small firms with access to long-term loans to invest in modern production for enhanced exports.

American investors are also represented in global trade negotiations and policies designed to enable them compete with imports.

Mr Rotich said entrepreneurs will be trained before accessing credit.

Access to cheaper capital is set to energise youth and women entrepreneurs given that 30 per cent of government tenders have been reserved for them.

The government is banking on the plan to accelerate the economy towards industrialisation with the expected growth in export of value-added goods.

Official data shows Kenya exported Sh581 billion worth of goods last year compared to Sh1.5 trillion that the country imported, opening a Sh919 billion trade deficit.

The Ministry of Industrialisation and Enterprise Development, the Export Promotion Council (EPC) and the US Embassy recently announced the quest to grow Kenya’s basket of exports to the US by easing barriers.

Mr Rotich said a taskforce is finalising the process to harmonise operations and lending rates of the proposed Biashara Bank.

Currently, the Youth Fund charges interest rate of 8.5 per cent per year while beneficiaries of Uwezo Fund pay a one-off three per cent administration fee.