The Government-backed credit guarantee scheme to help small enterprises acquire business loans has not worked as intended because partner banks insist on lending at market rates.
Co-Operatives and Micro and Small Enterprises Development CS, Simon Chelugui said although seven commercial banks had signed onto the scheme after the government advertised it a few years ago, they never gave favorable credit terms as anticipated.
“The seven banks that signed have insisted on basing their interest on current risks,” he said.
The government had sought banks that would match its investment in a fund that would be used to advance credit to small businesses. “The government then went on to invest an initial Sh3 billion,” he added.
Chelugui spoke when he officially closed the Cooperatives, MSMEs, Trade and Revenue Expo held in Embu ahead of the Madaraka Day Celebrations to be held Thursday.
He said the UDA government has given priority to the development of micro and small enterprises as the drivers of employment and revenue generation, hence the focus in the sector.
Embu Governor Cecily Mbarire welcomed the government’s intention to upgrade Runyenjes KCC cooling plant into a full processing plant.
She promised to consider Chelugui’s request that her government signs a contract to have preprimary school children be given some milk.
The governor also welcomed a proposal to have macadamia nuts farmers form a cooperative that’ll give farmers a voice in the pricing of their produce, while noting that registration of farmers would start immediately.
Source: Kenya News Agency