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{
    "id": 1026622,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1026622/?format=api",
    "text_counter": 338,
    "type": "speech",
    "speaker_name": "Kipipiri, JP",
    "speaker_title": "Hon. Amos Kimunya",
    "speaker": {
        "id": 174,
        "legal_name": "Amos Muhinga Kimunya",
        "slug": "amos-kimunya"
    },
    "content": "is not even more than Ksh100 million can compete with the East African Breweries Limited (EABL) which brews in billions. The EABL will access credit based on its reputation but the local guy has no reputation. The bank will then price his risk higher and give him money, but at very high interest rates. When that risk is guaranteed by the Government, then the operating framework for the two is equalised. Hon. Speaker, for purposes of appreciating the sector, in 2019, it was estimated that these MSMEs contributed about 40 per cent of our Gross Domestic Product (GDP) and 90 per cent of the new jobs. We are talking about 7.41 million institutions but from studies, about 20 per cent are registered. The rest are operating informally. This Credit Guarantee Scheme will only operate for those who are formally registered. You cannot get everyone when you do not know how and where to track them once they get the money. Those are some of the proposals that have been put in the Bill. It is to ensure that only those who are registered and paying tax, have business permits and can meet the few conditions, access this scheme so that we do not have the flying-by-night organisations that will want to take advantage of any initiative to ride on it. We do not know what they might do with the funds. Hon. Speaker, like I said, financing is only one of the problems. I am sure that even as we provide these finances, there is still need to look at the regulatory environment. I am glad the House passed a raft of laws to simplify the business environment which will help these MSMEs. Research is still an issue but we will put in some efforts to help them. Members might be asking why the Uwezo Fund, Youth Enterprise Development Fund, Women Enterprise Development Fund and the Micro Enterprise Support Programme have not addressed the issues herein. These Funds are targeted at separate groupings to start people off and give them confidence to get into the formal market in order to access credit and compete with everyone else. Hon. Speaker, Kenya is not the only country doing this. There are similar schemes in different jurisdictions. We have a similar scheme in Ireland where the Irish Government is providing about 80 per cent to facilitate that range between the equivalent of Ksh1 million and Ksh120 million for a period of up to seven years. Tanzania runs a similar scheme, a robust credit guarantee scheme, which provides access to credit by MSMEs, especially within the agriculture sector. That is one of the sectors that the formal credit providing institutions do not want to touch, given the vagaries of nature. It is a dynamic situation where a whole crop can be wiped out in one season and banks have no security. Singapore has its enterprise financing scheme which covers a number of enterprises, financing needs such as working capital need, fixed assets loans, venture debt loan and trade loan among others."
}