NAIROBI, The Kenyan government has started a process to set up one strong financial institution through the merger of six organizations which currently run parallel and sometimes perform overlapping roles.
The move is aimed at increasing efficiency, resolving overlaps and better utilising resources to achieve economies of scale.
The institutions to be merged to form the mega development finance institution are Kenya Industrial Estates, Development Bank of Kenya, Industrial Development Bank of Kenya, Uwezo Fund, Youth Enterprise Development Fund and Women Enterprise Development Fund.
In order to make the merger and transition seamless, the government established an inter-agency task force to review the legal regulatory and institutional frameworks involved in the process. The task force has already issued interim orders while it completes its work.
The Head of Public Service, Joseph Kinyua, has issued a circular to the affected agencies informing them of the decisions to be implemented in the interim period.
Kinyua informed the agencies that have been identified for the merger that they should put on hold any action relating to restructuring, recruitment of new staff, filling of vacancies in boards and the review of terms of services for all staff.
Transfer of staff to and from the identified agencies has also been frozen. The circular also stops the disposal, transfer, lease or new acquisition of assets. Where there is an ongoing process of acquisition of property, the affected agencies have been instructed to consult the Head of Public Service.
According to the plan, the new agency will become a one-stop shop for loans from the government ranging from industrial development loans to loans for a specific cadre of people such as women and the youth.
This move is in line with the parastatal reforms that were recommended by the President’s task force on parastatal reforms in 2013, Kinyua said. The move is also to ensure there is efficiency in the financing of youth and small and medium-size enterprises (SMEs).
Source: NAM NEWS NETWORK