ABC Bank Group Managing Director Shamaz Savani said the MoU will increase the sectors’ overall productivity as the new funding supplements the €7.5 million (Sh770 million) already being provided by the European Investment Bank (EIB) for onward lending to SMEs.
“The ABC Bank is setting aside Sh2 billion of credit line access and we’ll be giving long term financing with our partnership with European Investment Bank in foreign currency and long term lending up to ten years at concessional rates for various kinds of expansionary projects,” he revealed.
“ABC Bank is also offering export credit, asset finance, supply chain finance and insurance products all under one roof,” he added.
The bank will provide the export and import SMEs with trade finance while availing developmental finance to developers within the Export Promotion Zones (EPZ) to construct commercial warehouses and godowns.
“ABC Bank will provide SMEs with tailor-made financial services through a dedicated relationship management team and care desk specifically to serve exporters,” he asserted.
“Our importing and exporting SME customers will have an opportunity to benefit from the facility’s multi-currency long term lending opportunities, which cushion them against currency fluctuations and allow them to expand their operations,” he stated.
The MoU is within the framework of the Public Private Partnership (PPP) initiative which will allow the government to invest more in the economy jointly with the private sector, and EPZA Chief Executive Officer Mutule Kilonzo revealed that they are planning an ambitious expansion of SMEs to mitigate the trade imbalance in the country.
“We’re planning to roll out into 30 locations in this country and establish 35 incubators,” he said.
“This will create 1,050 SMEs and we want to grow and incubate them in five years with the partnership of ABC Bank to become large exporters for this country,” he announced.
Assistant Minister for Trade Manson Nyamweya said the government is committed to supporting the SME sector because export-focused SMEs play an important role in earning the country foreign currency, which improves the country’s balance of payments.
“This is a key growth area in the emerging economies, including Kenya, because of its potential to create jobs, generate wealth and reduce poverty,” he noted.
“The government is in the process of providing a legal framework to create a favourable environment for the private sector to invest capital, skills and technology in the provision of public services,” he explained.
Nyamweya lauded the EPZA for its efforts to stimulate growth in the export sector through the establishment of incubators and by partnering with Mount Kenya University to link academia and the business community.
“We are pleased with the EPZ Export Business Accelerator program under which the Authority is nurturing small exporters into larger exporting enterprises through tax incentives, good infrastructure and other special services,” he said.
“The MoU that EPZA signed with Mount Kenya University brings together industry players, academia and government and once the three players can work together, my ministry will officially be able to launch the Trilateral Network,” he announced.
The Assistant Minister said he expects Parliament to debate and pass the PPP Bill 2011 and the Special Economic Zones (SEZ) Bill 2010 in the next few months, which will see greater participation and flexibility of potential areas that are limited under the current regime.
“Once enacted, the two laws will foster the working relationship between the government and its agencies and the private sector,” he declared.
“This will open up more economic opportunities for the economic development of Kenya,” he added.