Local retailers secured the lion's share Sh429 billion from lenders to
open new stores and refurbish outlets amid rising fierce competition
including from incoming global brands. FILE PHOTO | NMG
Local retailers secured the lion's share Sh429 billion from
lenders to open new stores and refurbish outlets amid rising fierce
competition including from incoming global brands.
According
to the 2018 Economic Survey, the money, representing 21.9 percent of
the Sh1.95 trillion total bank funding for the private sector, was
advanced to retail chains and wholesale operators in form of commercial
bills, loans and advances.
Nakumatt, a once-thriving
booming regional operator, is the main victim of the foreign
competition, with several prime stores taken over by incomers,
French-based Carrefour and South Africa’s Shoprite while Tuskys and
Naivas took over some locations.
The manufacturing sector, now showing a rebound at 5.1 percent growth, attracted Sh335.1 billion or 17.1 percent allocation.
But
agriculture, billed as Kenya’s backbone for decades, received a paltry
Sh82.3 billion (4.2 percent) indicating a need for banks to innovate new
farmer-specific loan products.
Real estate, enjoying
new demand in residential properties in urban areas, thanks to
devolution and an influx of wealthy foreigners as well as expatriates,
attracted Sh368.44 billion (18.8 percent).
A large
chunk of loans to the real estate sector was spent in Nairobi where the
county government approved development of Sh210 billion projects,
creating hundreds of jobs for skilled and unskilled workers as well as
new business for construction material dealers, built environment
professionals and new revenue streams for the county and national
governments.
Building and construction also took up an
additional Sh113.7 billion, though this was a marginal 1.8 percent rise
compared to the historic 2017 growth of 30.7 percent. The latter was
mainly driven by a vibrant real estate that had reported a lot of new
business in Nairobi where Sh240 billion worth of projects were approved.
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