Local businesses yet to benefit from Sh100bn Obama pledge

Implementation of deals and partnerships forged during The Global Entrepreneurship Summit (GES) that took place mid this year has been a challenge.

Deals worth billions of shillings were struck, valuable contacts exchanged and vital networks built in aiding more than 4,000 entrepreneurs worldwide succeed in business.

It was expected that going forward, local small traders would immediately reap big, but that has not been the case.

More than five months later, local entrepreneurs still do not have access to the Sh100 billion pledged at the summit.  

The funds were announced by US President Barack Obama on June 25 ahead of the GES in July for youth and women entrepreneurs across the world.

“The challenge of accessing the funds still remains the biggest barrier for most SMEs and entrepreneurs in business. When we ask, we are directed to the US commercial section at the embassy,” said Kenya National Chamber of Commerce and Industries (KNCCI) Chairman Mr Kiprono Kittony in a phone interview with Smart Company. 

The chamber lobbies for the interests of entrepreneurs countrywide.

Mr Kittony has been at the forefront in ensuring that entrepreneurs gain from the GES, which played a major role in exposing local traders to the world markets.

“For us and many other traders, if we had not made enough partnerships with overseas bodies like the East African Trade and Investment Hub as well as the US National Business League while at the conference, we would be challenged at the moment,” Mr Kittony said. 

WORK IN PROGRESS
The Ministry of Industrialisation and Enterprise Development, which is charged with implementation of the strategies spelt out at the GES, said a lot has been done towards making sure entrepreneurs benefit from available funds and access the export market. 

“A couple of things first had to be put into perspective. Only the National Treasury is in a position to state whether the funds by the US government have so far been received. Private sector funds that were promised by Chase Bank, Barclays Bank and Equity Bank are already being put to use,” said an advisor for textile and apparels value chain at the Ministry.

Equity Bank Group was among local lenders that benefited from a $200 million by Overseas Private Investment Corporation (OPIC) for youth and women SMEs over the next five years. 

Barclays Bank announced a Sh30 billion fund for SMEs as it loosened its lending regulations to ensure the funds reach its target.

Chase Bank announced a Sh60 billion fund for SMEs over the next three years.

Economic analyst Karithi Murimi said GES was meant to stimulate conversations on youth and women entrepreneurs.  

“The various things that youth were promised by the US will be handed over to the National Treasury through an agreement with the Ministry of Foreign Affairs and the Ministry of Industrialization,” Mr Murimi noted.

FOSTERING INTERACTIONS

The GES, he said, has since stirred up entrepreneurship matters countrywide.  

Entrepreneurs have always faced constraints in accessing funds to launch and grow their businesses.

President Uhuru Kenyatta directed Industrialisation and Enterprise Development Cabinet Secretary Adan Mohamed to ensure continuous interaction with youth entrepreneurs after the GES.

An African Growth and Opportunity Act (Agoa) forum held locally in early November, was as a result of the President’s directive.

The event brought together representatives from the Kenya and US governments, the private sector, development partners and entrepreneurs from across the 47 counties.

Entrepreneurs were educated on detailed regulations and benefits provided by Agoa; the forum also helped build capacity necessary to successfully export products to the US under Agoa.