James Momanyi @jamomanyi
Institute of Certified Public Accountants of Kenya (ICPAK) yesterday called on the government to speed up the enactment of the Kenya Credit Guarantee Scheme Bill to help Small and Medium Enterprises (SMEs) access cheaper loans.
The interest rate cap regime has led to compressed credit in the market, something that has seen SMEs face difficulties in accessing credit, dampening the growth of the sector as some of the enterprises opt to close shop.
To remedy the situation, ICPAK is now appealing to the government to fast-track the passing of the Bill that has been shelved for sometime to give a lifeline to the sector. Speaking during the ongoing 26th Economic Symposium at a Nairobi hotel, ICPAK Chairman Julius Mwatu observed that the government’s new “Big Four” plan, especially the manufacturing sector. will not progress without the banking sector input.
“We urge the Government to accelerate the enactment of the Kenya Credit Guarantee Scheme Bill to further support access to credit by Small and Medium Enterprises and guide structured implementation and development of a vibrant Credit Guarantee Scheme that embraces a Public-Private Partnership (PPPs) Structure,” said Mwatu.
“Furthermore, the financial sector should expand its loan portfolio to conform with the recent fiscal legislation particularly, the Moveable Property Security Rights Bill which was recently assented into law. With the Act in place, the lenders should now provide credit facilities that use moveable property as collateral. The Act also creates an online electronic collateral registry,” he added.
On provision of 500,000 low cost housing units in the next five years, ICPAK has proposed to the government to prioritise review of the National Construction Authority Act, Built Environment Bill, and related legislations to ensure they address matters of sustainable building standards and design procedures for sustainability and safety of the housing sub-sector.