SME Trade Finance: Review of facilities available in - FSD Kenya

6 • SME TRADE FINANCE – REVIEW OF FACILITIES AVAILABLE IN KENYA
Chapter 2
METHODOLOGY
The project has been divided into three phases. The first phase, the Desk
phase, consisted of examining a number of documents and web sites. This led
to the presentation of the Inception report, prior to the arrival of the study
team in Kenya. The Field phase in Kenya comprised: 1) meetings with various
stakeholders, such as banks, SMEs and SME associations (listed in Annex 5.1),
and 2) preparing a draft final report to be presented during a workshop with
stakeholders.
The Final phase is to finalise the report. Consideration will be taken of the
comments received from parties involved after the circulation of the draft
report.
2.1 Desk phase
During the Desk phase, the following information and documents were
reviewed:
1.
2.
3.
4.
The existing development plans by the Kenyan administration
various donors3 related to the development of Kenyan international
trade; 4
The various economic sectors and the main characteristics of the
Kenyan SMEs active in international trade; 5
2 and
The existing international trade finance services rendered by the main
banks in Kenya and their costs;
The activities of the main banks and the Central Bank regulation with
regard to SMEs; and
2 Ministry of Trade and Industry. (August 2007). National Trade Policy Interim draft report. Retrieved from: http://www.tradeandindustry.go.ke/documents/ INTERIM NATIONAL_TRADE_ POLICY_
AUGUST_2007.pdf and the Private Sector Development Strategy (PSDS) 2006-2010: http://www.enterprise-development.net/resources/item.asp?resourceid=525
3 See the Private Sector Development Group web site: http://www.hackenya.org/documents/ download/index.php?option=com_docman&task=cat_view&gid=249&Itemid=254
4 Trade Facilitation Project in Kenya. (July 2005). The Study of Administrative Barriers and Other Impediments to Trade in Kenya. Retrieved from: http://www.revenue.go.ke/knowledgemanagement/pdf/
other/Report%20on%20Administrative%20Barriers%20to%20Investment%20in%20Kenya%20(July%202005).pdf
5 See the web site of the Export Promotion Council: http://www.epckenya.org/page.asp? page=PROFILE&submenu=PROFILE
6 Directory of banks in Kenya: http://www.centralbank.go.ke/bankinfo/banks.asp
Table 1: Expert time schedule
Task Period Output
The legal and regulatory environment for international trade finance in
Kenya.
Desk phase (from home base) Up to 28 June 2008 Presentation of the inception report
Field phase & draft final report workshop to a
workshop Final report
28 June to 16 July 2008 Presentation of the draft final report
(completed from home base) Before 31 August 2008 Completion of the final report
5.
A comprehensive list of all web sites and documents consulted can be found
in Annex 5.2.
2.2 Field phase
The team of consultants first met with the Financial Sector Deepening
Programme (FSD) team in Kenya to confirm the consultants’ understanding
of the terms of reference, and to discuss the planned activities as well as the
proposed structure of the final report. The team then organised meetings with
several involved parties. These parties, who are listed in annex 5.1, included:
6
Banks and financial organisations
SMEs and SME associations
Other entities, such as Government bodies, regulatory organisations or
trade supporting institutions.
Discussion centred on the following:
The strategy of the banks towards SMEs in general, and towards SMEs
involved in international trade in particular. The prevailing attitudes
amongst SME credit players towards trade finance for their SME clients.
The various trade finance instruments, services and financing facilities in
Kenya (according to the import/export financial flows described by the