Busia County has inaugurated a committee of the County Co-operative Enterprise Development Fund and County Trade Development Revolving Fund Board to help in promoting the growth of cooperatives and Small and Micro-Enterprises (SMEs).
Speaking during the inauguration, Busia Governor Paul Otuoma said the two funds aim to promote cooperatives and Small and Micro-Enterprises (SMEs) through access to affordable credit, hence improving the income levels of households.
“These funds have been there, but previously there was a management problem. People were using it for political benefit. This time we have said that we are considering the needs of our people and the development of our county,” he said.
Otuoma further stated that a total amount of Sh111.8 million has been issued as loans to traders and cooperatives.
“So far, 92 cooperative societies across the County have benefitted from the Cooperative Fund, with loans amounting to Kshs. 106 million, while another 386 individual traders have benefitted from the Trade Fund, with loans amounting to Sh5.8 million,” he said.
He tasked the board with the mandate to oversee the administration of these funds and to put in place strategies for the collection of the loan arrears in order to reduce the percentage of the loan portfolio at risk.
“The challenge we are having is loan defaulting. Up to date, we have around Sh100 million that have yet to be paid back from the previous lending, and this calls for the new team to embrace new strategies that will help to avoid this scenario,” he said.
The governor advised the two boards to avoid over-reliance on the County Exchequer for funding and instead come up with innovative ways of funding their activities to cooperative institutions and SMEs and for the management of the disbursed funds.
Dr. Otuoma said partnerships with commercial financial institutions will make more funds available.
“Let’s change the service delivery strategy from giving small loans to many cooperatives to focusing on funding ward-based farmers’ cooperatives. This will boost production capacity to feed into the County Aggregation and Industrial Park (CAIP) at Nasewa,” he said.
He also advised the Boards to consider partnering with financial institutions, which will make more funds available to Cooperative institutions and SMEs and for the management of the disbursed funds.
By Rodgers Omondi and Faith Nalwenge