Revisit one-stop shop idea for parastatals

Kenya has not had a serious discussion on parastatal reform since the privatisation era of the 1990s. FILE PHOTO | NMG 

By DENNIS KABAARA

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Summary

• Plan to merge six institutions reveals State firms task force report is gathering dust.

The recent announcement by Government to merge six institutions into a development bank is a timely reminder that the October 2013 Report on the Presidential Task Force on Parastatal Reforms remains largely unimplemented.

The State House statement informed us that the Kenya Industrial Estates (KIE), Development Bank of Kenya (DBK), Industrial Development Bank of Kenya (IDB), Uwezo Fund, Youth Enterprise Development Fund (YEDF) and Women Enterprise Development Fund (WEDF) will be merged to form the mega development finance institution.

The argument put forth is that this will eliminate parallel and overlapping roles, while improving efficiencies by exploiting economies of scale.

But is a mega-development bank the answer to the policy challenge around limited SME access to credit? That’s a question for a national conversation.