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:

  • Tourism

  • Rural housing

  • Agriculture

  • Rural enterprise

  • Small commercial businesses e.g Jua Kali etc.

  • 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:

  1. Industrial development bank (IDB) – give loans for industrial development in Kenya.

  2. Development Finance Company of Kenya (DFCK) – To finance various project will spur economic development and create employment.

  3. cKenya Industrial Estate (KIE) – this is a branch of Industrial and Commercial development cooperation (ICDC) dealing with industrial development.

  4. Agriculture Finance Co-operation (AFC)

  5. Post Bank – To mobilize rural savings

  6. National Housing Cooperation – for development of houses to ensure shelter for everyone.

  7. Kenya Tourism Development Cooperation (KTDC) for promotion of Tourism in Kenya.