The National Treasury is inviting parties to comment on the draft bill to form Kenya Development Bank. The bill seeks to merge three parastatals to form a state bank that will lend to Kenyan businesses.
The three institutions are; the Tourism Finance Corporation, Industrial and Commercial Development Corporation, and IDB Capital Limited. The bank will finance development projects in manufacturing in line with the Big Four Agenda.
A statement from the Treasury notes that the bill will establish an institution with “sufficient scale, scope, and resources to play a catalytic role in Kenya’s economic development by providing long-term financing and financial, investment, and business advisory services to meet objectives under vision 2030”.
The new Development Finance institution will also help reform the ailing manufacturing sector.
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The bank will offer loan facilities to medium and large scale businesses. It will also provide venture capital, seed money, and risk capital to develop industries. Nevertheless, the state bank will not be the only source of funding for enterprises. Treasury has put a limit on its scope to offer guarantees, loans, and investments instead of grants and subsidies.
According to The Star, the bank will have KSh 100 billion capital. The capital will form 20 billion shares worth KSh5 each.
Interested parties have until June 19th to submit their comments on the draft bill.
