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A greengrocer merchant demonstrates the impact of Fintech on SMEs through the use of mobile money-based payments/FILE/CBK

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MPs invite memoranda on PFM amendment Bill to cushion SMEs from virus meltdown

NAIROBI, Kenya, Jul 13 – The National Assembly is calling on Kenyans to submit their views on a proposed amendment to the Public Finance Management Bill which seeks to cushion micro, small and medium enterprises against the economic effects of the COVID-19 pandemic.

Through a public notice, Clerk of the National Assembly Michael Sialai says members of the public should forward their written submissions to his office based at Parliament Building either through electronic mail or post by Monday next week.

The Bill which is sponsored by the National Assembly Majority Leader Amos Kimunya tasks the Cabinet Secretary for matters relating to finance to submit an annual report on credit guarantees to micro, small and medium enterprises to Parliament.

“The report shall include total value of credit guarantees, credit guarantees liquatedated, outstanding credit guarantees and the risk assessment of the credit guarantees of classes of guarantees,” reads the Memorandum of Objectives in the Bill.

If the legislation is enacted in its current state, then the National Secretary will be able to prescribe regulations for the operation and establishment of schemes for the guarantee of credit extended to micro, small and medium enterprises.

“The Bill further outlines the circumstances under which the CS can guarantee a loan issued to a private borrower who does not have sufficient security,” read the Bill in part.

The Committee on Finance and National Planning will then conduct public hearings on the Bill after it was tabled in the House on July 2 before it broke for short recess.

The country has witnessed a slowdown in major sectors of the economy since the first case of COVID-19 was reported on March 13, with the government moving to enforce a countrywide dusk-to-dawn curfew and cessation of movement in some counties.

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During his 2020/21 budget statement, Finance Cabinet Secretary Ukur Yattani said the government will avail an allocation of Sh712 million to provide credit targeted to Micro, Small and Medium Enterprises in the manufacturing sector.

The government is keen to cushion and revive operations in key sectors of the economy by among others moves, increasing liquidity and supporting businesses.

Data collected by the Kenya Private Sector Alliance (Kepsa) indicates that the tourism, aviation, and non-food retail sectors which have faced the highest exposure to financial distress.

Manufacturing, chemicals, media, oil and gas, mining, and agriculture are also feeling the impact of the crisis, which has hit the local economy hard.

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