Traders sourcing goods from UAE to get interest free loans

KNCCI President Richard Ngatia (right) engages with Kenya Chinese Chamber of Commerce Chairman, William Zhou (centre) and Kenya National Federation of Jua Kali Associations CEO Richard Muteti at a briefing on the impact of Covid-19 on firms. [David Gichuru, Standard]

The Kenya National Chamber of Commerce and Industry (KNCCI) has partnered with its United Arab Emirates counterpart to provide interest free loans to traders sourcing products from the Arab markets.

This is to enable them expand their sourcing markets owing to the disruption caused by coronavirus leading to a lockdown in China where majority source products from.

Kenya’s annual import bill stands at about Sh1.76 trillion with China accounting for about 21 per cent of Kenya’s imports.

This means at least Sh377 billion worth of products may need to be sourced elsewhere or substituted by local production due to the disruption caused by the virus, which has so far claimed 10,442 as of yesterday.

KNCCI president Richard Ngatia said the chamber had entered into a partnership with Sharjah Chamber and would provide interest free Local Purchase Order (LPO) financing for the UAE markets.

“The scheme shall provide a credit period for 60-180 days and provide 80-100 per cent credit facility. It shall take 7-10 days to process this facility,” said Mr Ngatia.

He was speaking Thursday on behalf of other commerce chambers from various countries including China, Britain, France, the United Arab Emirates (UAE) and Estonia. The Jua Kali sector was also represented.

Emergency stimulus

At the same time, Ngatia asked the government to create an emergency stimulus fund targeting those depending on daily wages to cushion them from the economic havoc being caused by coronavirus.

He said the cash would be distributed for a period of 20 days via mobile money transfer to “marginalised and underserved.”

He said that it would encourage those hardest hit to stay at home as per President Uhuru Kenyatta’s directive.

“We recommend creation of an emergency stimulus fund to be disbursed through a money transfer service to the marginalised and underserved population, this demographic shall be the hardest hit as they depend on daily wages,” he said.

“This is to encourage those that earn daily wages and the elderly who do not work to stay at home. Provide them with a stipend for 20 days as we monitor the situation,” he added.

Ngatia also asked government to establish a business resilience fund to support core businesses and investments in key sectors such as construction, agribusiness, hospitality and manufacturing.

He encouraged local manufacturers to identify alternative suppliers in non-impacted regions of the world to diversify the supply chain.

He asked the government to ease import of manufacturing inputs. He further urged county governments to reduce or waive taxes and administrative fees on certain Small and Medium Enterprises (SMEs) and also defer payments for land rates for the next 90 days.

To businesses, Ngatia asked businesses to invest in risk management and those in international businesses to invest in insurance and bank guarantees to insure against financial shocks.

He said data compiled by the chamber showed a 10 per cent decline in exports from January to March.