The Kenya Development Corporation (KDC) during the launch of its strategic road map for the next three years/Courtesy
NAIROBI Kenya, Dec 10- The Kenya Development Corporation (KDC) plans to grow its loans to small and medium enterprises in the country by 500% over the next three years.
The new fully state-owned entity is looking to grow its loan books to SMEs from Sh4.52 billion in 2021 to Sh29.44 billion by June 2024.
“Facilitating and enabling small, medium, and large-scale enterprises access to finance to grow is vital to sustainable socio-economic recovery and growth, especially post COVID-19. Over time, however, these enterprises have been financially constrained due to limited resources. Cognizant of this, the Government, among other initiatives, has set up Kenya Development Corporation (KDC) to act as a one-stop-shop for financial and business advisory services for small, medium, and large enterprises,” KDC Board Chairman Michael Nyachae said.
He said this during the launch of KDC’s strategic road map for the next three years (2022-2024) aimed at bridging market gaps.
This event marks an end to the 13-year journey of the Government’s intention to create a strong single cross-sector Development Finance Institution.
“The Corporation is poised to address critical gaps in the market for long-term financing in sectors such as infrastructure, manufacturing, and agro-industry that cannot be met by commercial banks,” National Treasury Cabinet Secretary Ukur Yatani said, in a speech read on his behalf by National Treasury Chief Administrative Secretary Nelson Gaichuhie.
In a gazette notice dated July 2, Yatani merged Industrial and Commercial Development Corporation (ICDC), Industrial Development Bank (IDB) and the Tourism Finance Corporation (TFC) following the enactment of the Kenya Development Bank Act, 2020 to form the Sh100-billion behemoth that will primarily lend to medium and large-scale businesses to spur economic growth.
The merged entity was created as reforms fronted by the International Monetary Fund’s (IMF) as part of conditions for the Sh256.3 billion ($2.4 billion) three-year Extended Fund Facility (EFF) and Extended Credit Facility (ECF) to Kenya signed in February.
The move effectively puts into motion wheels for merging of similar entities playing the same roles and dissolution of others performing obsolete functions.
Treasury said that the purge will be informed by some of the recommendations given by the presidential task force on parastatal reforms in 2013, which have been gathering dust on shelves, alongside the State Corporations Act, 2012, and the 2015 Code of Good Corporate Governance.