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ENHANCING ACCESS TO AFFORDABLE CREDIT TO MICRO AND SMALL ENTERPRISES IN KENYA
Question  1: What is a Trade Development Joint Loan Board?
This is a loan Scheme that was established in 1954 by the Colonial Government upon realization that a majority of the African entrepreneurs could not access credit from mainstream banks due to lack of credit worthiness
The Scheme was established under the provisions of the Local Government Act, Cap 265 Section 104 which vested its administration with the Ministry of Local Government until 1965 when it was transferred to the then Ministry for Commerce and Industry through Section 38 (1) of the Interpretation and General Provisions Act – Cap 2 of the Laws of Kenya.
It is because of this that the scheme is referred to as a Joint Loan Board. Although it was established in 1954, it was not untill 1958 that it came to cover the whole country.
Question  2: Who gives the loans?
The loans are administered and advanced by the Ministry East African Affairs, Commerc and Tourism  through County Trade Development Offices. Currently there are 49 Boards spread across the Country, (see the full list of the offices at the back) the day to day running of the Boards is vested with the County Trade Development Officers.
Question  3: What are the objectives of the scheme?
•    To promote indigenous SMEs enterprises through provision of affordable credit.
•    To enable loan recipients gain experience in loan management so that they can graduate to source funds from established financial institutions.
•    Introduce small scale traders into borrowing funds for business.
•    Reduce rural-urban migration.
•    Create employment, stimulate income earnings and reduce poverty.
Question  4: Which businesses benefit from the loan?
•    Light industries
•    Services
•    Wholesale and retail establishments
Question  5: For what purposes are the loans advanced?
•    Purchase of trading stocks.
•    Purchase of raw materials/simple equipment for small scale industry /artisan.
•    Purchase of seasonal agricultural produce or livestock in districts where this is an important commercial activity.
•    Any other specific purpose which is a trade or industrial venture.

Question  6: How do you qualify to get a loan?
•    You must be an indigenous Kenyan over 18 years.
•    You must have been in business for at least 6months.
•    You must satisfy the loan authority that you keep simple books of accounts.
•    You must have a lockable business premises.
•    You must be the owner-manager of the business.
•    You must be carrying out a legal business recognized by the relevant government organs.
•    You must secure the loan through one of the following: title deed, plot certificate and life insurance policy.
Question  7: What is the procedure for access
•    Avail yourself at their County Development Office and request for an application form which is issued free of charge.
•    Fill the form completely and return it to the County Trade Development Office.
•    The County Trade Development officer then arrange to appraise your business and provide recommmendations.
•    The board in its meeting will consider recommendations of the County Trade Development Officer to award or reject your application.
Question  8: What is the minimum and maximum amount available from the scheme?
The minimum is Kshs. 20,000/= and maximum is Kshs. 300,000/=
Question  9: What are the terms and conditions of the loan?
•    Interest rate is 8% per annum.
•    Repayment period is 1-2 years.
•    Grace period is one month from the date of receiving your loan cheque.
•    Repayment is monthly.

Question  10: How do I repay my loan?
•    You can repay your loan directly in the Board’s bank account and surrender the deposit to the office so that you can be issued with receipt.
•    You can use a banker’s order.
•    You can also use Postal Corporation’s Money Order.

Question  11: Am I able to get my monthly repayment statements from the board?
Yes, you can request your monthly repayment statements from the County Trade Development Officer. The statement will show how you have repaid your loan and the balance due.

Question  12: Can I get a repeat loan from the board  once I complete repaying my loan?
Yes, you can get a repeat loan from the Board, but this will depend on your repayment record. The Board will also consider whether you are “mature” enough to graduate to source loans from other established financial institutions offering higher loan amounts.

Question  13: What other services can I receive from the Board apart from the loans?
•    The board normally  organizes training for the potential beneficiaries before and after the
loan is disbursed.
•    You can also receive counselling and advisory services as you repay your loan.
•    You can put your requests to the County Trade Development Officer on areas that you wish to be trained.
Question  14: What are the advantages of this loan scheme?

•    This loan is affordable with no processing or administration fee charged.
•    The interest rate is low (currently 8% per annum ) and is not varied during the repayment period.
•    You don’t need to be a member or save with us to qualify for the loan.
•    The loan is advanced to you individually.
•    You enjoy other services as you repay the loan.
•    It prepares you to graduate and source loans from other established financial institutions.
Question  15: Where can you get loan services?

Vist the County Trade Development Offices in the County in which you are operating your business
 
 
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