DEVELOPMENT BANKS AND SPECIALIZED FINANCIAL INSTITUTIONS
There are some sectors in the economy that may not secure adequate funds from commercial banks for various reasons.
a) May take a long time to realize returns
b) High risk associated with such sectors
c) unattractive/low return
d) Uncertainty or highly volatile returns
e) Require heavy investment in infrastructure
These sectors include:
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Tourism
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Rural housing
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Agriculture
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Rural enterprise
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Small commercial businesses e.g Jua Kali etc.
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Such sector e.g agriculture and tourism are essential for a balanced economic growth and development.
The government has thus established financial institutions to cater specifically for these otherwise unattractive but essential sector. They include:
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Industrial development bank (IDB) – give loans for industrial development in Kenya.
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Development Finance Company of Kenya (DFCK) – To finance various project will spur economic development and create employment.
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cKenya Industrial Estate (KIE) – this is a branch of Industrial and Commercial development cooperation (ICDC) dealing with industrial development.
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Agriculture Finance Co-operation (AFC)
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Post Bank – To mobilize rural savings
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National Housing Cooperation – for development of houses to ensure shelter for everyone.
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Kenya Tourism Development Cooperation (KTDC) for promotion of Tourism in Kenya.