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PRESIDENT UHURU KENYATTA AND INDIAN PRIME MINISTER NARENDRA MODI. FILE PHOTO | NMG
The Export-Import Bank of India (Exim) has activated a Sh1.54 billion ($15 million) credit line for Kenyan SMEs to finance capital goods imports from the Sub-continent.
The Indian lender signed the financing agreement with the government in July last year during the visit of Indian Prime Minister Narendra Modi to the country, and it came into effect on February 17 to run for five years.
The Sh1.54 billion is being channelled through the Industrial Development Bank.
Under the terms of the credit, SMEs will have to source two thirds of the goods or services under purchase from India, which will add to Indian exports to Kenya which stood at Sh208.4 billion in 2016.
“The goods including plant machinery, equipment and services including consultancy services from India for exports under this agreement are those which are eligible for export under the foreign trade policy of the government of India,” said India Exim bank chief general manager Deepak Kumar in a circular issued last week.
“Out of the total credit by Exim Bank under this agreement, goods and services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India and the remaining 25 per cent of goods and services may be procured by the seller from outside India.”
In addition to the credit line for SMEs, the Indian government agreed in July last year to open similar financing facilities for power transmission line projects being executed by Indian companies to the tune of $61.6 million (Sh6.3 billion), $29.95 million (Sh3.1 billion) for the upgrade of Rift Valley Textiles Factory (Rivatex) and $100 million (Sh10.3 billion) for agricultural mechanisation.
India trade bank opens Sh1.5bn credit line for Kenyan SMEs
