The ministry is targeting to advance Sh2 billion to small-scale factories largely in manufacturing through the Kenya Industrial Estates.
The State-backed loans are expected to create some 4,000 micro- and small-sized enterprises, a growth from the 3,400 firms it is targeting this year.
KIE loans largely support firms in buying machinery and bolstering working capital in a bid to boost rural industrialisation.
Industrialisation and Trade ministry plans to raise lending to small-sized factories by Sh300 million in the year starting July, signalling increased funding to industrial projects in peri-urban and rural areas.
The ministry is targeting to advance Sh2 billion to small-scale factories largely in manufacturing through the Kenya Industrial Estates (KIE) in the year 2022-23 financial year, a 17.6 percent rise over Sh1.7 billion budget allocation this year ending June.
The State-backed loans are expected to create some 4,000 micro- and small-sized enterprises, a growth from the 3,400 firms it is targeting this year.
KIE loans largely support firms in buying machinery and bolstering working capital in a bid to boost rural industrialisation.
Leather, textiles and agro-processing sub-sectors have been mapped as low-lying fruits in a bid to revive and modernise Kenya’s cottage industries under the manufacturing pillar of the Big 4 Agenda.
If achieved, this will be the largest outlay to the cash-starved entrepreneurs in more than a decade.
Ministry data shows KIE advanced a record Sh1.22 billion in the year ending June 2020, helping to create 2,443 firms.
That funding, however, more than halved to Sh982.3 million in the year that followed, helping some 1,964 small firms.
The development financier has since the onset of Covid focused on lending to firms hardest hit by Covid-19 shocks.
Indigenous firms
“KIE was involved in the Post-Covid Economic Recovery Programme (PC-ESP) and instituted support measures to MSMEs severely affected by the Covid-19 pandemic,” the ministry wrote in its budget report.
Set up in 1967 to fund indigenous entrepreneurs, KIE usually offers credit of between Sh100,000 and Sh20 million for an annual interest of 10 percent, repayable in eight years with a grace period of up to 12 months.
