SMEs set to access youth, women enterprise loans after funds’ merger
Industrialisation PS Wilson Songa. Twenty two constituencies that failed to provide land for construction of constituency industrial development centres have missed out on the economic stimulus initiative meant to promote entrepreneurship. FILE PHOTO |
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Public officials said that the Biashara Bank would also cut bureaucracy and other barriers that have kept away many players in the informal sector from accessing the funds.
Informal traders will borrow at lower rates when the proposed Biashara Bank takes up the roles currently played by various investment funds that state has established for youths, women and micro-enterprises. Public officials said that the Biashara Bank would also cut bureaucracy and other barriers that have kept away many players in the informal sector from accessing the funds.
The government plans to pool together the funds currently managed by the Youth Enterprise Development Fund, Women Enterprise Fund and Uwezo. Also to be taken by Biashara Bank is the proposed Micro and Small Enterprises Fund meant for Jua Kali artisans.
“A task force is already working to harmonise operations and lending rates of the Biashara Bank,” Industrialisation PS Wilson Songa said on Friday.
At the moment, the Youth Enterprise Fund, for instance, charges interest at the rate of 8.5 per cent per year while beneficiaries of the Uwezo Fund pay a three per cent administration fee. Similarly, whereas it is mandatory for youths and women to be in groups to access cash from Uwezo Fund, an individual entrepreneur can apply for a loan under the youth fund.
Dr Songa said that a harmonised interest rate would be set at level deemed by the task force to be beneficial to the informal sector. The applicants are also expected to benefit from easy processing of their loans once the multiple the current government institutions are dismantled. Currently, politicians manage Uwezo Fund in constituencies.
Dr Songa said that with the formation of the Biashara Bank, vendors, stall operators and artisans would be eligible for soft loans just like other groups under Uwezo, youth and women funds. “Those are the modalities the task force is exploring,” he said, adding that empowerment of special groups would spur industrialisation in the country.
Mpoko Bokanga of United Nations Industrial Development Organisation said that in addition to the business stimulus fund, the government ought to finance research institutions to generate need-based innovations. “There should be an innovation fund for techpreneurs to come up with solutions for driving a knowledge-based economy,” said Dr Bokanga.
The officials spoke on the sidelines of a workshop organised by the African Development Bank (AfDB) in Nairobi to launch a report on state of Eastern Africa’s Manufacturing Sector.
The report, which showed that the contribution of manufacturing to economies in Eastern Africa can grow with adequate attention to agro-processing, textiles, leather, assembly of advanced products, industrial commodities and furniture.
