The Kilifi County government has urged residents to join cooperative societies and saccos in order for them to benefit from the County revolving fund.
The fund popularly known as Mbegu Fund was first introduced in the county in 2018 to help small and medium scale businesses to get financial aid without interest rates.
It started with Sh. 30 million in the 2018/2019 budget but the law was revised to make it one per cent of the total county budget and in the 2019/2020 budget Sh. 105 million was set aside.
According to the Mbegu Fund administrator Ms. Mercy Ngombo, Sh. 53 million has already been disbursed to 307 groups including 13 groups of people living with disabilities.
She added that the main target of the funds was cooperative societies and Sacco’s since they are eligible for better funding.
“It is an affirmative fund to bridge the gap between financial institutions and borrowers have a grace period of 90 days before they start repaying the money in a maximum two years,” she said.
She also said that the youth who get tenders with the Kilifi County government and do not have capital are financed 100 per cent of the tender amount by the fund.
“A group of ten members gets a minimum of 100,000 and maximum of 500,000 while cooperatives and Sacco’s get between one million to five million shillings and that why we call upon residents to join form Cooperatives and Sacco’s so that we can realize the full potential of the fund,” she added.
She added that only 15 cooperatives in the entire county had received loans amounting to Sh. ten million and that the main challenge facing the sector was the high dormancy rates in the cooperatives.
Among the challenges facing the cooperatives include stiff regulations that require audited accounts, borrowing powers and at least minutes of annual general meetings from them before they can access the loans.
Most cooperatives in the area are farmers based and they have been dormant after the collapse of the cotton, cashew nut and tourism industry she said.
“The dormancy rate among cooperatives is quite high and we are working on how best we can revive the dormant ones and also get new ones,” she said adding that her department has send out officers in all the seven sub counties to train and capacity build cooperative societies and Sacco’s.
She also said that only four Sacco’s in the entire county had benefited from the fund at a tune of Sh. 1.5 million each and encouraged especially boda boda riders and mama mbogas to join one of form them so that they can gain.
“The Saccos and cooperatives have only borrowed 15 per cent of the amount set out for them which is Sh. 20 million and we call upon the boda boda people to organize themselves,” she added.
Her sentiments were echoed by the Chief officer for Trade Tourism and cooperative development Mrs. Mary Chari Mkare who said that the funds targeted the youth to start businesses and employ themselves and also small businesses that are unable to get financial aid from commercial banks.
“Our main target is the youth, women and men joining cooperatives and Saccos so that they can get money to aid in value chain addition of their products since most of them sell raw and unprocessed goods which fetch them poor market prices,” she said.