Fund industrial clusters, says Sichinga

GOVERNMENT has invited the private sector, commercial banks and other financial institutions to provide funding solutions with modest interest rates for the construction of industrial clusters in the country.
About K300 million is required for phase one of the project in 30 districts.
Minister of Commerce, Trade and Industry Robert Sichinga said while efforts have been made towards the mobilisation of funds by engaging the Ministry of Finance, African Development Bank and the World Bank’s International Finance Corporation, there is need for other lending institutions to come forward.
“The value chains are many, some are in cotton, soya beans, acquaculture, dairy and groundnuts. But we are restricted to identify the value chains not in more than five districts per province this year.
“The opportunity is huge but the only constraint is inadequate funding to the Citizen Economic Empowerment Commission (CEEC) as the Ministry of Finance has to divide [the funds], so this is why we are inviting the private sector and banks to provide financing at affordable interest rates,” he said.
Mr Sichinga, however, expressed concern at the high interest rates ranging between 26 and 35 percent charged by banks.
“Banks should be modest in providing interest rates if funding is to become viable. CEEC is currently giving funding at 12 percent to enable beneficiaries make a profit and if you are talking about interest rates of 35 percent, then you wipe out profit margins,” he said.

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