"The draft bill is with the National Treasury. The government is looking to fast track it, "he said.
Muia says the fund created will reduce costs and risks of lending and increase money for lending in financial institutions.
"Part of high interest charged by banks on SMEs is because of higher risk of lending and that higher risk is reduced when there is a guarantee behind that lending," he said.
He said SMEs would increase sales by 70 percent while employees would go up by 52 percent if credit guarantees are offered to financial institutions in the country.
He said guarantee funds should also be created at both national and county level to provide guarantee for credit through qualified financial institutions to SMEs in priority sectors such as agriculture, construction and exports.
Muia was speaking on Thursday at the launch of Credit Guarantee Schemes in
The report indicates that over nine million informal businesses in the country have tended to seek finance from micro finance institutions for their expansion programs and working capital needs.
According to the report, SMEs in
The report also recommends the government to develop and implement suitable guidelines that provide for prompt payments for supplies made and services rendered to the public sector,
Arrangements should also be made to encourage and enable exporters to use cheaper means of receiving payments such as open account and cash against documents.
Main providers of guarantees in
Utilization of CGSs are low with the targeted beneficiaries utilizing only 6 percent of the guarantees availed by the government and multilateral organizations and 31 percent of those from development partners.
Among the credit guarantee schemes in
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