Skip to content
Investment

Delayed Payments to Kenyan SMEs to Be a Thing of the Past

BY David Indeje · May 5, 2016 09:05 am

Small and Medium-sized enterprises (SMEs)  that have been going through financial tribulations as a result of delayed payments from those they supply their goods and services to will soon have a reason to smile if the proposed Procurement and Disposal Act 2015  is passed and enacted.

The Act will require all entities that delay payments to suppliers to incur additional charges for each day that is defaulted.

This implies that companies that have been known to delay payments to their suppliers, will be liable to stiff commercial interest rate on the overdue amounts. This is in the new procurement law that is being prepared by the National Treasury.

Most suppliers of goods and services to most of the entities are the SMEs who have had to endure the endless suffering of having to operate without money due to delayed payments. Some SMEs have had to close down for lack of capital to operate as a result of this. This is, however, prone to be a thing of the past as the team at the treasury prepares fresh regulations that will define the penalties as well as timeframe within which the payments must be made.

According the Section 140 of the Act, the procuring entity shall pay interest on the overdue amounts…the interest and liquidated damages to be paid shall be in accordance with the prevailing mean commercial lending rate as determined by Central Bank of Kenya….

In February 2011, 28 members of the European Union Bloc adopted a directive that provided that public agencies to pay for goods and services within 30 days and private enterprises to pay within 60 days failure of which attracts interests that are pegged at eight percent above the European Central Bank’s reference rate and Kenya is following closely.

Article by Juma Fred.

David Indeje is a writer and editor, with interests on how technology is changing journalism, government, Health, and Gender Development stories are his passion. Follow on Twitter @David_Indeje David can be reached on: (020) 528 0222 / Email: info@sokodirectory.com

Trending Stories
Government and Policy Kenya Is Struggling With Debt As Modest Revenue Is Collected With Limited Development Investment Steve Biko Wafula
Entrepreneur's Corner Kenyan Clients Don’t Care Whether You’re In the ICU: The Brutal Truth Of Entrepreneurship Soko Directory Team
Headlines Are The SACCOS The Infinite Money Glitch Of Kenya? Soko Directory Team
Government and Policy Saccos Clamp Down On Struggling Businesses, Recover Sh491 Million In A Ruthless Crackdown Soko Directory Team
Entrepreneur's Corner The Greatest Skill Everyone Should Master Is The Skill Of Knowing How To Manage Money Soko Directory Team
Related Articles
Investment UBA Group To Commence Full Banking Operations In France Soko Directory Team
Headlines New Business Rises At Strongest Pace In Six Months Soko Directory Team
Headlines Are The SACCOS The Infinite Money Glitch Of Kenya? Soko Directory Team
Investment Why HF Group’s Rights Issue Is The Opportunity You Can’t Ignore Steve Biko Wafula
Investment UBA Kenya’s $282 Million Commitment To Kenyan Entrepreneurs Soko Directory Team
Explore Soko Directory
Banking Blogging Commodity Watch Did you know Entertainment Entrepreneur's Corner Feature Government and Policy Headlines Investment Lifestyle Market News Money Opinion Press Releases Stock Watch Technology
Soko Directory Archives