National Treasury Cabinet Secretary Ukur Yatani has defended the decision to collapse three funds into one, Biashara Kenya Fund, saying the decision is aimed at making credit access to targeted groups more efficient.
Treasury is in the process of amalgamating Youth Fund, Women Enterprise Fund and Youth Enterprise Development Fund to create Biashara Kenya Fund, in what the treasury boss says will also save taxpayers unnecessary operational expenses incurred by running the three outfits.
“We are establishing the Biashara Kenya Fund and that’s why we are in the process of merging Youth Enterprise Development Fund, Women Enterprise Fund and Uwezo Fund to consolidate them so that we can enable efficiency and objectivity in disbursement and removing overhead costs and address issues of regulations, “said Yatani.
Speaking on the side lines of a meeting with the Parliamentary Committee on Delegated Legislation meeting in Mombasa to deliberate on some of the regulations and legislation reforms affecting funds in Kenya, Yatani said the government is keen to increase funding to the new kitty.
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According to Yatani, treasury plans to allocate Kshs. 14 billion to Biashara Kenya Fund as seed capital from the Kshs. 2.5 billion announced earlier to ensure it reaches more targeted special interest groups.
The decision to collapse the three parastatals into one entity had initially been met with opposition from a section of Members of Parliament in August last year, saying it would be counterproductive as the new entity does not solve the unique problems in the funds’ management.
Legislators had also expressed concerns over the possibility of job losses at the three funds, saying the proposal did not provide sufficient transitional provisions for employees, assets, and liabilities including remedies for defaulters.
But according to Yattani, the new direction is keen to capture the majority vulnerable groups including pastoralists groups and jobless youths. He said the process of operationalisation is on its advanced stage.
“We are also looking at establishing a drought management fund so that we can cushion Kenyans and enable the government to manage the drought situation in the country.”
Yatani added that already, six local banks have pledged to be on board to operationalise the process.
In July 2020, the government through a Gazette Notice, called on interested members of the general public to submit written comments or memoranda on the draft Public Finance Management (Biashara Kenya Fund) Regulations, 2020.
The target group will get loans from the State at 6% interest under the new Fund which last year received Kshs 2 billion to jump-start its operations.
The committee is set to come up with a final document that will guide on the new fund.