Business Daily Kenya:
Nicholas Waitathu @PeopleDailyKe
The government will create a Sh130 million revolving fund in 2017/18 financial year for lending to little in addition to medium-sized enterprises (SMEs) inside the leather industry.
Industry, Trade in addition to Co-operatives Cabinet secretary Adan Mohamed yesterday said the funds will be sourced via a regional financial institution in addition to the Kenya Industrial Estates (KIE).
“We are inside the final stage of negotiations with the Eastern in addition to Southern African Trade in addition to Development Bank, commonly known as PTA Bank, for a Sh30 million loan.
KIE will commit via its annual budget Sh100 million as part of taming finance challenges little traders are grappling with,” he said. Addressing the media in Nairobi after launching a several-year strategic plan aimed at revitalising the leather footwear sector, Mohamed said the funds will be advanced at special rates below the market rate.
For the last decade, he said, the sector has received more than Sh500 million via various sources in addition to the figure is usually set to improve—in addition to between Sh500 million in addition to Sh1 billion allocated inside the national budget every year.
The CS said the government will, in conjunction with county authorities, establish clusters in all the 47 regions to train SMEs on modern business practices.
“Our leather SMEs will receive support via Comesa Leather in addition to Leather Products Institute (LLPI) in terms of developing business plans in which respond to the current dynamics inside the global market,” he said.
Comesa LLPI executive director Mwinyikione Mwinyihija said the institution has developed a 10-year strategy which targets to facilitate the development of 420 SME clusters to manufacture 42 million pairs of shoes.
“This particular development would certainly incentivise the tanneries to expand their production lines into finished leather,” he added. The African leather industry, despite its huge potential, is usually grappling with huge imports—mainly second-hand products, said Mwinyihija.
“Even though the operating business environment is usually experiencing some challenges, there is usually need for all the value chain players to join hands having a view to exploiting the untapped potential.
“Kenya leather industry promoters need to enhance internal trade, over in addition to above developing leather products targeting the growing youth in addition to middle class,” he said.
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State to set up Sh130m fund for leather SMEs