The total approved credit to the manufacturing sector by both commercial banks and industrial financial institutions rose to KSh 639 billion in 2023 from KSh 528.9 billion in 2022.
- Total credit approved by industrial financial institutions increased from KSh 1.7 billion in 2022 to KSh 1.9 billion in 2023.
- Similarly, the total number of projects funded by these institutions rose from 303 to 362 during the review period.
- In the year under review, Kenya Development Corporation (KDC) approved KSh 510 million in loan to manufacturing compared to KSh 613.8 million approved in 2022. This was partly on account of decline in the number of projects funded by KDC from 9 to 4.
Demand for loans and advances in the manufacturing sector from the Development Bank of Kenya (DBK) increased in the year under review. In 2023, the bank approved KSh 384.0 million in three projects compared to KSh 353.0 million in the same number of projects in 2022. The projects were mainly for capital expansion in manufacturing of mattresses, industrial gases and printing.
Kenya Industrial Estates (KIE) continued to play its role of promoting micro, small and medium enterprises by financing their development activities. In the year under review, the amount of loans advanced by KIE to manufacturing sector increased to KSh 975.9 million from KSh 724.0 million in 2022. The number of manufacturing projects approved increased from 291 in 2022 to 355 in 2023.
According to latest Economic Survey Report, the manufacturing sector grew by 2.0 per cent in 2023 despite challenges such as high production costs, inflationary pressures and exchange rate fluctuations.
The sector’s volume of output expanded by 2.8 per cent in 2023, which was a slower growth compared to a 3.7 per cent growth recorded in 2022. The share of the sector to GDP, was 7.6 per cent in 2023.
The agro-based industries showed mixed performances with positive growths being reported in subsectors which engage in manufacture of Dairy Products; Meat and Meat Products; Prepared and Preserved Fruits and Vegetables; Bakery Products; and Prepared Animal Feeds.
On the other hand, Sugar; Cocoa, Chocolate, and Sugar Confectionery recorded declines. The non-food subsectors that recorded growths included Leather and Related Products; Plastic Products; and Structural Metal Products while Wood and Products of Wood; Paper and Paper Products; and Motor Vehicle, Trailers and Semi-Trailers, subsectors recorded production declines in the year under review.
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