![[Kenya] Government mulls setting up bank for women, youth](Youth Kenya.png)
[Kenya] Government mulls setting up bank for women, youth
In a bid to reach more women, youth, startups and small businesses and harmonize lending, the government is mulling merging the different lending facilities into a large development fund dubbed Biashara Bank, Swahili for Business 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 said there is need for new legislation for the proposed MSME development fund to achieve set goals.
“It has worked successfully in other 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 think-tank 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 during the launch of the report – Credit Guarantee Schemes:The Road to Expanding Business and Investment in Kenya.
Korir said the government was also looking at creating a pool of angel investors who will ptovide seed funding to the micro and small businesses.
