County Proposes Low-Interest Loans to Aid Small-Scale Traders

Kisumu: Kisumu County is poised to offer low-interest loans to small-scale traders, pending the approval of a motion currently in the county assembly. The Trade Fund Bill and Regulations 2023, introduced by the County Executive last week, aims to create a seed fund enabling these traders to access financing for their businesses.

According to Kenya News Agency, the Executive has requested the County Assembly to authorize a Sh50 million start-up fund for this initiative. Salim revealed that, upon approval, the program would be executed in partnership with a local bank, which is expected to match the county’s allocation, thereby extending the benefits to a larger number of traders.

Salim shared that negotiations are underway with several banks, and the county will soon announce the financial institution selected to implement this initiative. She emphasized that all recommendations from the Controller of Budget have been incorporated to ensure compliance with legal requirements.

The initiative primarily aims to assist small-scale traders facing economic challenges and heavy taxation. Salim noted that many of these traders have been excluded from conventional credit systems, leaving them vulnerable to high-interest loans from informal lenders like Maasai shylocks. These lenders, while offering loans without traditional requirements like collateral or extensive paperwork, often impose exorbitant interest rates.

Additionally, Salim pointed out that the traders’ limited access to bank financing, due to being considered high-risk, has compounded their difficulties. In her interview with KNA, Salim explained that the county government, along with the financial partner chosen to administer the program, plans to conduct capacity-building workshops for traders. These workshops are intended to promote financial literacy and awareness, ensuring successful loan uptake and repayment, ultimately benefiting a broader segment of the trading community.