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{
    "id": 1026775,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1026775/?format=api",
    "text_counter": 491,
    "type": "speech",
    "speaker_name": "Funyula, ODM",
    "speaker_title": "Hon. (Dr.) Wilberforce Oundo",
    "speaker": {
        "id": 13331,
        "legal_name": "Wilberforce Ojiambo Oundo",
        "slug": "wilberforce-ojiambo-oundo-2"
    },
    "content": "In business, one of the major challenges has always been finance and financing for business enterprises. In many cases, the small and medium enterprises have had a challenge has been rightly put by the colleagues who have spoken before me. One of the greatest challenge has been accessing financing from the banking sector. We had “unbankables” before banks like the Equity came into this country. It is those who could not be banked. Consequently, they could not access financing. The purpose of this amendment to create a Credit Guarantee Scheme is to allow the SMEs that have no credit history and are not creditworthy to access funds from the formal banking sector. Hon. Temporary Deputy Speaker, banks price their loans based on the risk profile of the borrower. Banks also price their loans based on credit history. Most of these SMEs have no credit history. They have very unstable businesses, so to speak. So, their risk profile is very high. Therefore, the rate of interest charged on such loans is invariably high, beyond the ability to pay. Consequently, a Credit Guarantee Scheme of this nature will alleviate this problem and allow the banks and the lenders to pass over some of these risks to the Government through the Cabinet Secretary by guaranteeing these traders. I take this opportunity to congratulate the new Chair of the Departmental Committee on Finance and National Planning, my colleague in the Orange Democratic Party (ODM). As they look at the various amendments they propose to make, they should look critically at the thresholds provided. A turnover of 100 million employed number of slots of 250, those people, they could be SMEs, but they now have the chance. The fear is that they will over concentrate on the top tier and forget the small businesses that could not access bank loans, the small women, the Abedos as we call them in my constituency of Funyula, who sell wares seated on the floor in the markets in the evenings, would have no access because probably for one reason or the other, they do not wish to join groups so that they have access to Uwezo Fund, the Women Enterprise Fund or the Youth Enterprise Fund. It would be prudent for the Committee to seriously have a thorough look and redo the threshold so that we concentrate on the low end of this category, the ones that sell on the floors of markets and all over. These are those who want"
}