Treasury Secretary Ukur Yatani has capped loans to be accessed by businesses owned by youth, women and disabled people under the new Biashara Kenya Fund that will receive Sh2.5 billion to start operations.
Mr Yatani has also lowered the maximum loan for a single borrower under the Fund to Sh2.5 million in the refreshed Public Finance Management (Biashara Kenya Fund) Regulations 2021 from Sh3 million in the previous rules unveiled last year.
The new regulations will guide the operations of the Biashara Kenya Fund and end a seven-year process to merge Uwezo Fund, Youth Enterprise Development Fund (YEF) and Women Enterprise Fund (WEF).
The process of establishing a single affirmative action fund followed a recommendation in the Presidential Task Force on Parastatal Reform Report of 2014 to remove duplication of roles, cut overheads and enhance efficiency.
Women- and youth-owned enterprises will each get a 35 percent share of the loans under the Fund, while businesses owned by persons with disability will access up to 10 percent.
The share for micro-, small- and medium-sized enterprises has been capped at 17 percent of the available loans while the remaining three percent will cater for administrative expenses.
“The [Fund’s oversight] board may recommend the variation of the thresholds with the concurrence of the Cabinet Secretary for the time being responsible for gender, in consultation with the Cabinet Secretary for the time being responsible for youth, and approval of the Cabinet Secretary responsible for finance for use in any financial year,” Mr Yatani says in the regulations.
The Treasury has retained the cost of borrowing from the Fund at six percent, half the average 12.08 percent commercial lending rate in April.
The Fund will also partner with private sector organisations to boost lending. Its oversight board has been allowed to lend approved agents such as microfinance institutions and non-governmental organisations at an annual interest of three percent for on-lending.
The agents will match the cash advanced to them and lend women, youth, persons with disability and small traders at a maximum interest rate of 10 percent.
The government’s intervention is geared at enabling these three groups’ ventures —who have been marginalised by lenders due to high risk of default and lack of collateral —to access credit for growth and development.
“We want to inject efficiency in the whole system (of affirmative loan disbursement)…and the big advantage is that the Fund will grow from Sh2.5 billion to Sh14 billion,” Mr Yatani said earlier.
Latest audited financial statements show Uwezo Fund, set up in 2014, had disbursed Sh6.06 billion as at June 2019 to 65,169 women, youth and persons disability groups.
Youth Enterprise Development Fund and Women Enterprise Fund (WEF), both established in 2007, had given out Sh12.8 billion and Sh3.03 billion respectively to nearly 1.16 million youth and 13,482 women self-help groups by June 2019.
Auditor-General Nancy Gathungu, however, passed a qualified (doubtful) opinion on Women Fund and disclaimer opinion on Youth Fund and Uwezo Fund— pointing to insufficient evidence to form a conclusion.
Despite banking industry data showing over the years that the rate of default among small traders was lower than that for corporates, banks continue to assign them a higher risk profile which usually prices them out of the market.
To derisk the credit market for small traders, Treasury in November last year unveiled Credit Guarantee Scheme which covers 25 percent of the loan in an event of default.
A woman, youth or a disabled person shall be eligible to apply for a business loan if they are in a registered group where at least 70 percent of the members are aged between 18 and 35 years.
Money borrowed from Biashara Fund will be used for business only, with applicants expected to prove establishment of business.
KQ resumes Mumbai flights after 4 months
- Kenya Airways will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.
- The airline in a notice to its customers yesterday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.
Kenya Airways #ticker:KQ will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.
The airline in a notice to its customers Monday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.
The airline will then resume full operations on the route on September 20, flying three times per week on the Indian route, which is one of the most lucrative destinations on its network.
Passengers on the route will part with Sh46,000 ($419) for one-way air ticket on economy class seats from Nairobi to Mumbai- prices that are relatively the same compared to what it was charging before the Covid-19 pandemic.
“Welcome back onboard! Fly from Nairobi to Mumbai starting Thursday 16th September with normal schedules resuming from Monday 20th September 2021,” said the airline in a notice to its customers yesterday.
KQ Suspended passenger flights to and from Mumbai on April 30 until further notice, following a government directive on travel between India and Kenya due to a Covid-19 crisis in that country.
The airline said on Friday that passengers who had booked tickets after May 1, the date of the last flight from Mumbai to Nairobi, will have to change their plans.
Affected passengers, KQ said, could also take vouchers for the value of their fare for future travel within 12 months.
India has seen soaring infection rates in the recent days, since the discovery of a new virus variant. Last month, India put on lockdown one of the states following a spike in cases of Covid-19.
Other countries that have banned flights to India include France, the UK Bangladesh, Oman and Hong Kong that have banned travel to and from India or asked their nationals coming from the Asian country to isolate themselves in government-approved hotels.
India has so far detected 33,264,175 corona virus cases with the number of deaths hitting 442,874 as at September 13.
A large number of patients from Kenya also travel to India every year for specialised medical treatment, especially cancer care, helping to drive medical tourism in the densely populated country that boasts affordable and easily accessible healthcare.
Lower import volumes push mitumba prices to new highs
- Traders paid Sh100,527 on average per tonne of the used clothes, popularly called mitumba, compared to Sh96,286 the previous year.
- Kenya Bureau of Standards (Kebs) banned importation of the clothes from late March through mid-August in a bid to contain the spread of the life-threatening coronavirus infections.
- Findings of the Economic Survey 2021 suggests dealers shipped in 121,778 tonnes of mitumba in 2020, a 34.02 percent fall compared with 2019 and the lowest volumes since 2015.
The average price of a tonne of second-hand clothing items imported into the country crossed the Sh100,000 mark for the first time last year on reduced volumes in the wake of safety protocols and guidelines to curb spread of coronavirus.
Traders paid Sh100,527 on average per tonne of the used clothes, popularly called mitumba, compared to Sh96,286 the previous year.
Kenya Bureau of Standards (Kebs) banned importation of the clothes from late March through mid-August in a bid to contain the spread of the life-threatening coronavirus infections.
Findings of the Economic Survey 2021 suggests dealers shipped in 121,778 tonnes of mitumba in 2020, a 34.02 percent fall compared with 2019 and the lowest volumes since 2015.
Last year’s drop was the first dip since 2011 when 76,533 tonnes were shipped in compared with 80,423 tonnes the previous year, the official data collated by the Kenya National Bureau of Statistics (KNBS) shows.
The import bill for the merchandise amounted to Sh12.24 billion, a drop of 31.11 percent, or Sh5.53 billion, year-on-year.
TIn imposing the temporary ban on used clothes, Kebs had applied a standard which prohibits buying second-hand clothes from countries experiencing epidemics to ensure disease-causing microorganisms are not imported into Kenya.
Higher quality and relatively lower prices for mitumba has continued to drive demand for used clothes at expense of locally-made products amid higher margins enjoyed by traders largely operating in informal markets.
The lucrative second-hand clothing market has seen traders from China —a key source market for the merchandise —open shops in Gikomba, Kenya’s largest informal market for mitumba, in recent years to cash in rising demand.
Earnings from exports of articles of apparel and clothing accessories fell 5.32 percent to Sh32.92 billion last year compared with 2019, data indicates.
Court backs Atwoli union in horticulture membership feud
- A trade union that is led by the long-serving Central Organisation of Trade Unions (Cotu) boss Francis Atwoli has survived an attempt to stop it from representing over 60,000 workers in the horticulture industry.
- Newly registered Kenya Export, Floriculture, Horticulture, and Allied Workers Union (Kefhau) had filed as a case in the Employment and Labour seeking to bar the Atwoli-led Kenya Plantation and Agricultural Workers Union (KPAWU) from representing workers in the industry.
A trade union that is led by the long-serving Central Organisation of Trade Unions (Cotu) boss Francis Atwoli has survived an attempt to stop it from representing over 60,000 workers in the horticulture industry.
Newly registered Kenya Export, Floriculture, Horticulture, and Allied Workers Union (Kefhau) had filed as a case in the Employment and Labour seeking to bar the Atwoli-led Kenya Plantation and Agricultural Workers Union (KPAWU) from representing workers in the industry.
Mr Atwoli is the secretary-general of KPAWU. The rival union claimed KPAWU had encroached on its area of workers’ representation.
Justice James Rika, however, dismissed the claim and ruled that the dispute should have been taken through conciliation, and was therefore presented in court prematurely.
He also stated that Kefhau must go beyond its registration and recruit sufficient members from the employers, to be granted recognition and organisational rights.
“Registration on its own, does not afford the claimant (Kefhau) recognition. Until there is proof that Kefhau has satisfied Section 54 of the Labour Relations Act, the status quo must be maintained,” said the judge.
“Kefhau must recruit at least 50 percent plus one, of the unionisable employees in the floriculture and horticulture industry, members of the Agricultural Employers Association to be considered for recognition,” he stated.
He noted that there is a Recognition Agreement and CBA, binding Mr Atwoli’s union and Agricultural Employers Association, affecting 73 Flower Growers Group of employers, and over 60,000 employees.
“It is objectionable for Kefhau to be allowed organisational rights, and the legitimacy to receive trade union dues and agency fees, from over 60,000 employees, just on the strength of registration as a trade union,” said the judge.
Kefhau wanted the court to declare that it is the sole trade union, which is allowed by its constitution to carry out activities in the export floriculture and vegetable industry, and an order restraining Mr Atwoli’s from representing workers in that area.