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Nakuru Governor Lee Kinyanjui and KCB Director Retail Anastacia Kimutai Signs an MOU during the launch of Nakuru County Enterprise Fund worth Kshs 850 million that was held in Nyayo Garden Nakuru on January 7, 2021. [Harun Wathari, Standard]
Small and Medium Enterprises (SMEs) in Nakuru County are set to benefit from a Sh850 million fund launched yesterday by the county government to provide cheap credit to players in the sector.
The county government and the Kenya Commercial Bank (KCB) signed a memorandum of understanding (MoU) that will see the applicants access loans at a rate of 7.5 per cent per annum.
“This is a new dawn for our traders who for long have faced impediments of high-interest rates by lenders on loans for expansion of their businesses,” said Nakuru Governor Lee Kinyanjui.
KCB Retail Director Anastacia Kimutai explained that under the agreement, the county government shall provide a loan interest subsidy to support the programme.
“We shall offer loans at 12.5 per cent, out of which the applicant shall cater for 7.5 per cent, while the county government shall provide a subsidy of five per cent,” said Kimutai.
The launch held at Nyayo Gardens in Nakuru City marked the implementation of the Nakuru County Enterprise Fund Act 2020 drafted by Finance County Executive Committee Member (CECM), Dr Peter Ketyenya.
“KCB Bank has committed Sh800 million to kickstart this programme and has received Sh52 million from the county government towards a five per cent interest subsidy on the loans,” said Kimutai.
Kinyanjui explained that under the agreement with the bank, loan applicants shall receive free training to ensure there is proper management of the funds and the creation of sound investments.
“Giving loans to people without the necessary skills is setting them up for failure. Applicants shall be trained to ensure the financial support is reflected through the growth of the businesses,” said Kinyanjui.
The governor regretted that most players in the SME sector in the county had stagnated for decades due to lack of skills or funding.
“Nakuru has been home to major businesses that have expanded to the rest of the country. We also have many that are stuck in one place for decades,” said Kinyanjui.
“It is not enough to start a business without seeing it grow, some with the potential to become corporate bodies,” he added.
The governor lauded ward representatives for approving the law paving way for the fund, terming it as one of the most progressive and people-centred laws passed at the county assembly.
“We want to look back in the next three years and take pride in the strides made,” he said.
The governor noted that conditions set by financial institutions such as audited accounts and physical addresses were a major challenge to credit access for business owners in the country.
“We have agreed with KCB to remove some of the stringent conditions to ease access. We are also setting up a ten-acre SMEs Centre to give mobile traders a conducive business environment,” he said.
Ms Kimutai noted that with Nakuru now a city, entrepreneurs should take advantage of such avenues of financing to tap into the many opportunities arising from the new city status.
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