Managing Director Karen Kandie told, that SMEs with healthy balance sheets seeking to meet market demand or upgrade their machinery to reduce operational costs would be considered.
Kandie said the facility would finance up to 70 to 80 per cent of the project cost with beneficiaries given a leeway to start repayment after a two-year grace period within the next 10 years.
The interest rate is not beyond 14 per cent but will depend on individual risk assessment of the SME’s business.
“They should not be startups since we need an existing firm that requires specific machinery to enable them to upgrade their technology for efficient production or enhance production for the export market,” she said.
The minimum contract value/loan will be Sh5 million with the target being the leather, agro-processing, textiles, chemicals and manufacturing investors.
The facility comes after last year’s visit by Indian Prime Minister Narendra Modi to Kenya where the Export-Import Bank of India offered the line of credit to Kenyan SME industries for import of capital goods from India.
The five-year arrangement through the IDB Capital requires that the benefiting SMEs import two-thirds of the goods or services from India leading to an increase of Indian exports to Kenya from last year’s Sh208.4 billion.
The Managing Director added that the value of equipment and services sourced from Indian companies must be at least 75 per cent of the contract price while the remaining 25 per cent of goods and services may be procured by the seller from outside India.
Source: Business Daily