County plans to give SMEs financial boost
Small and medium-sized enterprise might soon secure finances from the county government to boost their businesses.
Trade and Tourism Executive Peter Ketyenya has drafted a Bill that seeks to provide a legal framework for the establishment of a county enterprise fund.
“The Bill will empower women, youth and persons with disabilities through financial support for their enterprises. This will go a long way in poverty reduction and increasing household income,” said Dr Ketyenya.
The fund will be run with money apportioned by the county assembly, contributions, gifts or grants, earnings from the investment of the fund and any other cash payable or vested in the fund. Only those doing business in the county will benefit from the fund.
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Apart from providing affordable credit to the SMEs for development and expansion, at least 25 per cent of the kitty will be spent on investment training, technical assistance in product and market development, facilitating technology acquisition, adoption and utilisation.
To ensure prudent utilisation and investment of funds, only those who have gone through the prescribed training will be loaned money.
If the Bill sails through, a six-member board will be formed to oversee the administration of the fund.
Guidelines will be issued on the number of enterprises to be funded and strategies to be used in mobilising a target group.
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“A loan granted under this Act shall only be used for financing an enterprise or business approved by the board at the time of application for loan. A person who utilises the loan in non-business undertaking shall be disqualified from accessing the loan,” the Bill adds.
The Bill further provides that the executive shall identify a financial institution through which all monetary transactions shall be handled. The county has entered into a partnership with Kenya Commercial Bank.
The bank’s head of micro-banking, Zachariah Cheruiyot, said through the partnership, eligible applicants for the county fund would have an opportunity to get additional funding from the bank.