State agency sees Sh12.6bn fresh loans after merger

Kenya Development Corporation (KDC) Director-General Christopher Huka. PHOTO | POOL

By CONSTANT MUNDA

Kenya Development Corporation sees its credit pipeline hitting Sh12.6 billion in the

first year of the merger of state-backed development finance institutions, more than double the loan book it inherited from the three defunct firms.

KDC –the offshoot of a merger of Industrial and Commercial Development Corporation (ICDC), Tourism Finance Corporation (TFC), and Industrial Development Bank Capital Ltd– says it had Sh10.6 billion in its pipeline by end of February at different stages of appraisals.

The state-backed DFI inherited a loan book of about Sh4.5 billion from ICDC, TFC and IDB Capital which the Treasury finally collapsed into one entity late last year after more than seven years of reforms.

“The projects take long to really say by this time ‘we are disbursing’. The project lifecycles are long. So some projects that come into pipeline this financial year, by the time you do their appraisals and project reviews, it will be towards the end of the next financial year,” KDC interim director-general Christopher Huka said.

In its three-year strategic plan through 2024, the state-run financier targets to issue out Sh8.64 billion this financial year, nearly doubling to Sh16.31 billion in the year starting July.

“In our strategic plan, we didn’t want to have a conservative target. Based on our assets, we said ‘we should be able to sweat these assets to project that kind of growth,” Mr Huka said.

ALSO READ

• 

  BOSS TALK: Nowhere to hide for State loan defaulters as KDC stirs

• 

  KDIC to send debt collectors after clients of collapsed banks

“We will push those numbers. This financial year [ending June] will have created for us a base from where we can say what we want to focus on.”

The firm estimates its total assets to close this June at Sh36.19 billion and cross the Sh50 billion mark by end of June 2024.

KDC has set sights on new opportunities in renewable energy, post-harvest management systems, livestock value chain, and blue economy – sectors it says were not quite exploited by the defunct DFIs –to grow its assets book.

ICDC, whose existence dates back to the pre-independence period in 1954, was formed largely to fund Kenya’s industrialisation dream as well as high-potential sectors that support economic growth by providing affordable funding through debt and equity.

On the other hand, TFC was established in 1965 to provide affordable long-term development funding and advisory services for investment in the tourism industry, while IDB Capital came into existence in 1973 to help mid-and large-sized businesses establish and expand through competitive funding.

cmunda@ke.nationmedia.com