KIE seeks partners to boost funding for small businesses

The Kenya Industrial Estates (KIE) is eying partnerships with private organisations to meet increasing demand for business incubation and funding.

But the entrepreneurship development agency says what it is offering is inadequate, considering the number of applications they receive every year.

“The demand for our products is too high. In the last two years, we have received about 4,000 applications but have only managed to meet about 200 in one year and 300 in another,” said Mr Julius Mokogi, the chief executive officer of KIE.

To bridge the gaps, the financier told the Business Daily last week that it is keen on partnerships with the yet-to-be established county governments that, together with private investors, will provide adequate financing, industrial sheds and SME parks.

Mr Mokogi said that the agency, which nurtures and finances the micro, small and medium industries, was feeling the weight due to budget constraints, even though government funding has been growing.

In the next financial year, the agency has asked for an Sh800 million allocation compared to Sh400 million this year and Sh245 million in 2010/2011.

This financial year, it has already disbursed Sh300 million in loans, introduced new products which include loan top ups, bid and performance bonds and group guarantee financing and has built four industrial sheds in Nairobi, 22 in Kakamega and 46 in Nyamira.

Interest is charged at 15 per cent on a reducing balance, loans range between Sh100,000 and Sh4 million though the organisation was this year able to provide a Sh14 million credit.

The turnover of the beneficiary companies range from Sh6 million to Sh50 million a year.

Enterprises are also able to access other support services through the organisation and it is targeting to create at least 2,000 jobs in the country, train 4,500 entrepreneurs and provide credit facilities to at least 300 SMEs in the coming financial year.

It is looking to adopt the agency banking concept and partner with commercial banks to expand its reach and construct at least 70 industrial sheds in Karatina, Bondo, Malindi, Kapsabet and Wajir.

“We intend to see how we can enter into public private partnerships especially on infrastructure development and with the counties so that we can tap private sector resources to help develop more industrial sheds and SME parks,” said Mr Mokogi.

KIE acts as an incubation centre for firms, majority of which are in the manufacturing sector—providing them with loans, sheds, linkages to markets and training.

Some of the companies that have benefited from the agency’s services are Mastermind Tobacco in Nakuru, Sagana Tannery in Muranga, East African Spectre and Leather Masters in Nairobi, Makena Women Spinners in Meru and Kalumbi Fruit Processors in Sultan Hamud.

The agency has over the past two years been going through a restructuring after a new board and management took over in 2010.