Kisumu County to roll out low-interest loans for small traders

Kisumu,

Wednesday, November 29, 2023

KNA by Chris Mahandara

Small-scale traders in Kisumu County are set to benefit from low-interest loans from the county government if a motion presented in the county assembly sails through.

The Trade Fund Bill and Regulations 2023 tabled by the County Executive last week seeks to establish a seed fund for the small-scale traders to access loans to fund their ventures.

County Executive Committee Member (CECM) in charge of Trade Farida Salim said the Executive has written to the County Assembly to approve a Sh50 million start-up kitty to roll out the initiative.

She added that once approved the facility shall be implemented in partnership with a local bank which is expected to match the allocation with a similar amount to benefit as many traders as possible.

“We have opened negotiations with a number of banks and soon we will be able to announce the financial institution that we will be working with to roll out this initiative,” she said.

The executive, she added, has factored in all the recommendations of the Controller of Budget to ensure that the fund is in line with the law ahead of the official launch.

Farida said the initiative targets to support small-scale traders who are struggling amidst hard economic times and heavy taxation.

Most of the traders, she said, have been locked out of the conventional credit systems exposing them to high-interest loans from shylocks and middlemen.

She pointed out Maasai Shylocks who have dominated the lending space in the sector pushing some of the traders who are unable to repay money advanced to them out of business.

“Locked out of formal credit systems and blacklisted by digital lenders, the traders are finding solace in Maasai shylocks that come without conditions such as collateral, strenuous paperwork or even listing with the Credit Reference Bureau but end up charging exorbitant interest rates,” she said.

The traders, she added, have also borne the brunt of limited financing by banks which consider them high risk.

In an interview with KNA in her office, Farida said that the county government alongside the financial partner that will roll out the programme shall conduct capacity-building workshops for traders to enhance uptake and repayment of the funds.

“We are going to provide financial literacy and awareness to the traders to ensure that they take advantage of this initiative and at the same time repay the loans to benefit other traders,” she said.

Courtesy; KNA