The Export-Import Bank of India (Exim) has activated a Sh1.54 billion credit line for Kenyan SMEs to finance capital goods imports from the Sub-continent.
The Indian lender signed the financing agreement with the government in July last year during the visit of Indian Prime Minister Narendra Modi to the country, and it came into effect on February 17 to run for five years. The Sh1.54 billion is being channelled through the Industrial Development Bank.
Under the terms of the credit, SMEs will have to source two thirds of the goods or services under purchase from India, which will add to Indian exports to Kenya which stood at Sh208.4 billion in 2016.
“The goods including plant machinery, equipment and services including consultancy services from India for exports under this agreement are those which are eligible for export under the foreign trade policy of the government of India,” said India Exim bank chief general manager Deepak Kumar in a circular issued last week.