Economy

Treasury cuts derail KIE loan disbursements to applicants

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Treasury slashed KIE’s budget by Sh350 million in the year to June 2017. FILE PHOTO | NMG

The fate of 238 entrepreneurs whose loan applications were approved by the Kenya Industrial Estate (KIE) Limited now lies with MPs after the Treasury slashed the lender’s budget by Sh350 million in the year to June 2017.

KIE managing director Parmain ole Narikae urged the National Assembly’s Finance, Planning and Trade committee to increase the budget, saying the agency had approved countrywide loans amounting to Sh314.9 million before the budget cuts.

“For the financial year 2016/17, the KIE approved budget was Sh650 million, which was reduced to Sh350 million. The actual expenditure as at February 16 is Sh295.24 million,” Mr Narikae said.

He told the committee chaired by Ainamoi MP Benjamin Lang’at that committed countrywide loan applications awaiting disbursement as at February 16 amounted to Sh314.9 million.

He said KIE does not know what to do with 238 entrepreneurs whose applications were approved and collateral charged yet the Treasury had cut the budget.

“We have charged title deeds and the owners are waiting for money to be disbursed. This is a major challenge,” Mr Narikae said.

Committee vice chairperson Nelson Gaichuhie said MPs will decide what to do but did not give a commitment on whether the money would be allocated in the coming budget.

“We know that KIE is a very important lender to SMEs. We will see how to deal with KIE,” he said.

Mr Narikae said KIE had asked the Treasury to allocate it Sh1 billion, but this was reduced to Sh720 million and later cut to Sh500 million in the 2017/18 financial year.

“The projected budget for 2017/18 was Sh1 billion and the expected impact is to create 2,000 enterprises, 10,000 direct jobs and 50,000 indirect jobs,” he told the committee.