ICDC to partner with MFIs for SME lending

The Industrial and Commercial Development Corporation (ICDC) has set aside Sh1 billion to fund small and medium sized companies as part of its investment shift.

ICDC has initiated talks with several micro finance institutions to channel the funds that will be used to the startup companies.

The state owned investment firm is moving into the SME space in line with the government’s focus on scaling up entrepreneurs.

ICDC Executive Director Kennedy Wanderi said the corporation is working with the Micro and Small Enterprise Authority to identify microfinance institutions that will assist in availing reasonable funds to the market for Start ups and SMEs.

“We are working with other microfinance institutions so that we can access to them on a wholesale basis funds that can then be accessed to the microfinance institutions in bits that are smaller than the Sh5 million,” Mr Wanderi said.

ICDC wants to cut down on its current minimum loan of Sh5 million in an effort of boosting start ups and SMEs by providing equity and debt financing.

The institution is focused on industrial growth and development and offers a maximum loan of Sh300 million which targets solid business proposals.

ICDC offers interest rates depending on the risk profile of a borrower and is set to have a working framework that will allow for SMEs funding in Micro Finance Institutions in the end of 2016.

ICDC has a wide array of investments focused on equities, loans and asset management. The investment firm also has significant shareholding in several companies including Centum, Uchumi, Kenya Wine Agency and General Motors.

The firm wholly owns Funguo Investments limited which serves as its alternative investment vehicle.