The government has started a process of setting up one strong financial institution by merging the
functions of several organisations.
The are organisations whose roles sometimes overlap.
The move is aimed at increasing efficiency, resolving overlaps and better utilising resources to achieve economies of scale.
The institutions that will be merged to form the mega development finance institution include the Kenya Industrial Estates, Development Bank of Kenya, Industrial Development Bank of Kenya, Uwezo Fund, Youth Enterprise Development Fund and Women Enterprise Development Fund.
In order to make the merger and transition seamless, the government has established an inter-agency task force to review the legal, regulatory and institutional frameworks involved.
The taskforce has already issued interim orders while it completes its work.
Head of Public Service Joseph Kinyua has issued a circular to the affected agencies, informing them of the decisions to be implemented in the interim period.
Kinyua informed the agencies that they should put on hold any actions relating to restructuring, recruitment of new staff (including CEOs), filling of vacancies in boards and the review of terms of services for all staff.
“Any filling of vacancies in the boards as well as of CEOs across all identified state corporations/funds should only be done after necessary consultations with the Head of Public Service to ensure consistency with recommended reforms."
Transfer of staff to and from the identified agencies has also been frozen. The circular also stops the disposal, transfer, lease or new acquisition of assets.
Where there is an ongoing process of acquisition of property, the affected agencies have been instructed to consult the Head of Public Service.
According to the plan, the new agency will become a one-stop shop for loans from the government. The loans range from those for
industrial development to those for specific groups of people such as women and the youth.
“This move is in line wit the parastatal reforms that were recommended by the president’s task force in 2013,” said Kinyua.
The Head of Public Service added that the move will ensure efficiency in the financing of youth and SMEs.