Gulf African Bank Managing Director Abdalla Abdulkhalik (second left) and KNCCI chairman, Nairobi Chapter, Richard Ngatia (centre) exchange an MoU after the signing ceremony. The bank will support SMEs owned by women and the youth in Nairobi. PHOTO | collins omulo
US-Kenya deal to boost over 2,000 small companies
A partnership between Kenya and the US promises to see over 2,0000 small businesses in Nairobi, Mombasa and Vihiga counties venture into the expansive American market by December next year.
According to an MoU, Kenyan SMEs look forward to exporting fruits, fish, coffee, leather products, curios, textile and artifacts.
The expected entry of Kenyan enterprises into the US market is the culmination of a partnership between the Kenya National Chamber of Commerce and Industry (KNCCI) and the Centre of International Private Enterprise (CIPE), an American-based organisation affiliated to the US Chamber of Commerce.
The deal will see the KNCCI chapters of Nairobi, Mombasa and Vihiga improve their governance, financial resources and service to members through training, technical assistance and small grants to enable them produce quality products.
“The Nairobi chamber will capitalise on this partnership to foster its brand and enhance services to members. Already, the Nairobi chamber has signed an MoU with the Nairobi County Government to develop ways of easing doing business, with specific focus on being the voice of small businesses in Nairobi,” said the chairman of the KNCCI Nairobi Chapter, Mr Richard Ngatia.
“The selected chambers were put through a rigorous selection process. Ten counties applied for the partnership support. In this phase, we shall be working with three county chambers, and increase the number in the next phase,” said KNCCI county chamber coordinator, Mr Patrick Nyangweso.
According to the Office of United States Trade Representative website, Kenya is the 85th largest goods trading partner with the US, with a total of $1.5 billion worth of products exchanged between the two countries in 2015.
Products imported from the US during the period included aircraft, machinery, cereals and electrical machinery.
Kenya, on the other hand exported woven apparel, knit apparel, coffee, tea, edible fruits and macadamia nuts, totalling $565 million during the same period.
“Kenya and the US are very close allies economically. However, inter country trade has been more favourable to the US since Kenyan markets do not understand the US market. This partnership is set to open opportunities for American-Kenya trade,” according to the CIPE Regional Director Africa Lars Benson.
Vihiga and Mombasa County chambers will also use the partnership to grow their membership services and enhance policy development to support businesses in their respective counties.
More county chambers will be brought on board in the 2019/2020 financial year.
At the same time, a leading Sharia compliant bank has offered to support businesses owned by women and the youth by offering unsecured loans of up to Sh20 million.
Under a Memorandum of Understanding (MoU) signed between the Gulf African Bank (GAB) and the Nairobi chapter of the KNCCI, the financial institution will support SMEs owned by women and the youth in Nairobi.
The lender will offer unsecured against Local Purchase Orders (LPOs) for those with prior performance history and up to Sh3 million for starters registered under KNCCI.
“The SME sector is a key focus area for us. As such, we look for like-minded partners like KNCCI with a core mandate of growing businesses; seeking to link businesses to economic resources, and offering training opportunities to bridge skill gaps.
At GAB, we are proud to announce that, through our intensive youth and women banking programme, we take care of these through our strategic pillars — educate, empower and protect. Partnering with KNNCI will definitely expand this programme, said the bank’s managing director, Abdalla Abdulkhalik, during the signing of the MoU.
Speaking at the function, Mr Ngatia said the partnership would be critical to growing the SME sector in Kenya.
“SMEs have a history of giving financial institutions a wide berth, but through such a strategic partnership, they will access the much needed financing to propel their businesses,” he said.
The partnership will see the bank and KNCCI establish a programme of collaboration in areas such as training, providing financing opportunities to SMEs as well as skills and knowledge transfer to women and the youth.