We all hear of Government’s interventions to support SMEs and we all wonder, how. If you are like me who is skeptical of this government, you will take everything they say with a pinch of salt.
However, I have been very interested in manufacturing, and I decided to do some research on the Government’s intervention when it comes to the support of SMEs. From incubation, funding, machinery support. Check the article we wrote on various Government funding.
I visited the Export Processing Zones Authority last week, an Authority that provides investment opportunities for export oriented business. One thing that they noted from 1991 is that 98% of the companies that are based at EPZ are all foreign owned. This led them to create a hub for Kenyans who are already manufacturing locally and are ready to go to the next level in terms of export.
Export Business Accelerator (EBA) programme.
This programme was introduced after the Government noted that most SMEs lack a suitable business premises, they lack export market information, credit facilities and basically the lack of export facilitation.
The programme’s objective is to nurture SMEs that have majority local shareholding, to enable them mitigate these challenges. The SMEs should operate in the following sectors:
- Textitle and apparels
- Commercial crafts
- horticultural/ food processing
- textile and apparels
- Your business should operate from the sectors we mentioned above
- They do not work with start ups, but companies that have been existing
- You should plan to graduate from the EBA programme to normal EPZ programme after 5 years
- The total investment for your business should be under Ksh 40 M
- Have a labour force of not more than 100 workers
- Your company should have 75% local Kenyan shareholding
Well, if you are in manufacturing, you will appreciate the goodies that they are throwing your way:
- No corporate tax for 10 years and 25% thereafter
- 10 years withholding tax exemption
- 100% investment deduction over 20 years
- perpetual import and tax exemption on company inputs like raw materials, machinery etc
Business Development Services
This programme brings other stakeholders to support your business with services like:
- quality management
- technology sourcing and application
- export marketing
- credit facilitation
- business planning management
- export logistics and customs management
- product design and development
For you to get into the programme, you have to write a business plan and present it to the Export Processing Zones Authority for appraisal, with an application fee of Ksh 25,000. (ouch)
If the application is successful, you will be required to pay an annual fee of Ksh 100,000, get a NEMA license and you can start your operations.
I could only get 2013 statistics about this programme, but here goes.
There were 10 SMEs incubated under this programme, and they exported to Europe, USA, regional markets (COMESA, EAC) Their total export volume was Ksh 190M while direct employment was 170 workers. The total investment was Ksh 156M.
They are open for visits, but you have to book a day if you wish to see these facilities, as companies are operating in these spaces.
You can get more information by emailing firstname.lastname@example.org or call 0713051172
All the best!
Pic: Alltex EPZ2