This archive report was first published on 13 July 2020.
July 13, 2020 - The COVID-19 pandemic has brought significant economic challenges to Kenya, with various sectors of the economy experiencing a slowdown. In response, the National Assembly has proposed an amendment to the Public Finance Management Bill to provide relief to micro, small and medium enterprises (SMEs).
The proposed amendment, sponsored by National Assembly Majority Leader Amos Kimunya, seeks to task the Cabinet Secretary for Finance to submit an annual report on credit guarantees to SMEs to Parliament. The report will include details on the total value of credit guarantees, those that have been liquated, outstanding credit guarantees, and the risk assessment of the credit guarantees.
According to the Memorandum of Objectives in the Bill, the legislation will enable the National Secretary to prescribe regulations for the operation and establishment of schemes for the guarantee of credit extended to SMEs. The Bill also outlines the circumstances under which the CS can guarantee a loan issued to a private borrower who does not have sufficient security.
The Committee on Finance and National Planning will conduct public hearings on the Bill after it was tabled in the House on July 2. The government has already allocated Sh712 million to provide credit targeted to Micro, Small and Medium Enterprises in the manufacturing sector, as announced by Finance Cabinet Secretary Ukur Yattani during his 2020/21 budget statement.
