Financial Institutions to be Merged into One by Government

A strong financial institution is in the process of being formed by the government that will merge functions of a number of organizations running the same roles.

According to the Head of Public Service Joseph Kinyua, the move is aimed at increasing efficiency, resolving overlaps and better utilize resources to achieve economies of scale.

The institutions that will be merged to form the mega-development finance institution include the Kenya Industrial Estates, Development Bank of Kenya, Industrial Development Bank of Kenya, Uwezo Fund, Youth Enterprise Development Fund and Women Enterprise Development Fund.

In order to make the merger and transition seamless, the Government established an inter-agency task force to review the legal regulatory and institutional framework involved in the process.

The task force has already issued interim orders while it completes its work.

Kinyua informed the agencies that have been identified for the merger that they should put on hold any actions relating to restructuring, recruitment of new staff (including CEOs), filling of vacancies in boards and the review of terms of services for all staff.

“Any filling of vacancies in the Boards as well as of CEOs across all identified State Corporations/Funds should only be done after necessary consultations with the Head of Public Service to ensure consistency with recommended reforms,” said the Head of Public in his circular.

Transfer of staff to and from the identified agencies has also been frozen. The circular also stops the disposal, transfer, lease or new acquisition of assets. Where there is an ongoing process of acquisition of property, the affected agencies have been instructed to consult the Head of Public Service.

According to the plan, the new agency will become a one-stop shop for loans from the Government ranging from industrial development loans to loans for a specific cadre of people such as women and the youth.

Kintua noted that the move is in line with the parastatal reforms that were recommended by the President’s taskforce on parastatal reforms in 2013 and is going to ensure there is efficiency in the financing of youth and SMEs