Credit to Manufacturing Sector Grew by 13.05% in 2017

The total loans advanced to the manufacturing sector rose by 13.05 percent from 275.8 billion shillings in 2016 to 311.8 billion shillings in 2017 according to the Kenya National Bureau of Statistics (KNBS).

The value of approved credit by industrial financial institutions also increased by 18.18% from 1.1 billion shillings in 2016 to 1.3 billion shillings in 2017.

Figures from the Bureau of Statistics indicate that the number of manufacturing projects approved by financial institutions and other commercial banks decreased from 338 in 2016 to 293 in 2017, mainly due to a decline in the number of projects within the micro and small enterprises financed by Kenya Industrial Estate (KIE).

The Industrial Development Bank (IDB) Limited approved projects worth 200.1 million shillings in 2017 compared to 129.8 million shillings in 2016. The funding was for the expansion of three existing projects in the manufacturing of concrete poles, steel mills, and textiles activities.

Development Bank of Kenya (DBK), on the other hand, approved three projects for manufacturing of cement products, plastics pipes, and printing in 2017, which were worth 130.5 million shillings while the Industrial and Commercial Development Corporation (ICDC) approved credit worth 791 million shillings for seven manufacturing projects in 2017. Four projects were startups while three were an expansion to existing projects mainly in food and beverage sub-sectors.

The Kenya Industrial Estates plays a major role in promoting local entrepreneurship by financing and developing small-scale and micro enterprises. The number of manufacturing projects approved decreased from 325 in 2016 to 280 in 2017. However, the loans advanced for these projects rose by 9.5 percent to 181.0 million shillings during the review period. Manufacturers of food products remained the main beneficiaries of this funding accounting for 29.5 percent of the total loans advanced in 2017.

The figures in credit are expected to grow at the end of 2018 since manufacturing is one of the key pillars of the Big Four Agenda. This is because all efforts are being made to support the Big Four Agenda across all platforms.

By Rahab Mbiriti (Statistician)