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Financial institutions refer to institutions established by the government of Kenya to provide
financial services for the development of commerce and industry.
Types of financial institutions in Kenya
Industrial and commercial development corporation
Was established in 1954 to provide financial facilities in the fields of commerce and industry. It
was later re-organized in 1964 to play a more important dynamic role in the industrial and
commercial development of independent Kenya.
✓ To help African industrialist and traders to expand their operations for the overall
development of the country
✓ To provide assistance in the construction of shopping centres and industrial estates.
✓ To promote overall Africanisation of industry and commerce.
✓ To make investment in a wide variety of industrial and commercial enterprises.
I.C.D.C has helped in establishment of industries which has helped in reducing the country’s
dependency on imported goods examples of which are; Kenya national trading corporation,
Kenya film corporation , Kenya fishing industries, Kenya wine agencies .
Kenya industrial estates
Was started in 1967 as a wholly subsidiary of the industrial and commercial development
corporation. Its major role was to provide facilities to indigenous entrepreneurs starting small
scale industries.
In 1978 it was separated from I.C.D.C and became an independent parastatal under the
ministry of industry.
In 1988 KIE’s informal sector programme was started with the main aim of providing loans to
micro-entrepreneurs and jua kali industry.
Today KIE remains to be the principal government agency for creating and fostering industrial
development through the development and financing of small scale entrepreneurs.
✓ Provision of medium and long-term finance to small and micro enterprises
throughout the country.
✓ To raise industrial output of the country.
✓ To increase employment opportunities.
✓ Construction and management of industrial estates in various KIE branches.
✓ Provision of technical services i.e. assistance in project preparation, appraisal,
implementation, training etc.
KIE has so far established 31 0ffices all over the republic with their head office in Nairobi. These
include; 10 regional offices, 14 rural industrial development centres and industrial promotion
1. The industrial estates
KIE builds factories in an estate form which are then rented out to African industrialists. The
industrialists are financed to buy the necessary machinery and assistance to pinpoint sources of
raw materials and eventual markets. Managerial training and support is also made available.
2. The rural industrial development center
KIE provides workshops to industrialists at reasonable rents. Main objective is to enable
artisans to become the independent industrialists.
3. Industrial promotion area
These are industrial training centers where KIE train Africans who intend to become
independent industrialists.
In order to fulfill the objectives outlined, KIE undertakes the following activities;

Provide well planned factories at reasonable rents.
Suggest viable small scale and medium sized industries.
Conduct market surveys and help to find sustainable machinery and equipment
Provide 70% loan on machinery and equipment and 30% is meet by the entrepreneurs
✓ Assist in trial production to ensure quick take of the industry
✓ Advise on sustainable sources of raw materials and good markets
Sources of funds for KIE

Government of Kenya
German development bank
Danish international development agencies
Norwegian agency
European economic community
International development agency
African development bank
German technical assistance
United nations development organization
Achievements of KIE
✓ Has assisted almost 5000 industry projects
✓ Almost 946 million loans were approved and 672 disbursed hence provided loan to
✓ Creation of employment opportunities
✓ Promotion of rural industrialization
✓ Assistance to indigenous entrepreneurs to start small scale and medium term industrial
✓ Promotion of import and export oriented industries
✓ Promotion of jua kali sector.
Industrial development bank
Was incorporated under companies act (cap 4&6) on 12 January 1973 as a limited liability
company to stimulate industrial development in Kenya. This was though financial
establishment, promotion, expansion and modernization of medium and large scale industrial
enterprises principally in the manufacturing, tourism, engineering and agro-processing
industrial sector.
The IDB promotes industrial development in 4 different ways,
➢ Providing medium and long term loan finance.
➢ By providing equity participation in industrial companies.
➢ Providing guarantees for loans to industry from other sources.
➢ Underwriting security issues, shares and similar obligations of industrial companies.
Sources of finance
World bank
European development bank
African development bank
British export credit guarantee department
German development company
Kenya national assurance company
Kenya reinsurance corporation
Kenya commercial bank
National bank of Kenya
Commonwealth Development Corporation
Was incorporated by acts of British parliament. Its main objective is to assist the
commonwealth nations in the development of their economies. CDC provides financial,
technical and managerial assistance for various projects in the fields of agriculture, industry,
transport, communication, fisheries, housing etc.
CDC has provided assistance to the following organization or projects in Kenya;

Kenya power and lighting Co.Ltd
Development finance Ltd
Nairobi city council
Kenya tea development authority
East Africa building society
Housing finance company of Kenya
Mumias sugar company Ltd
CDC provides assistance for establishment and expansion of various projects in the following

Advances long term loans and equity shares.
Helps in the management of the projects and resources.
Invests in the projects controlled by others.
Provides services like purchasing marketing and personnel for some selected projects.
Kenya external trade authority
This authority has been established to find out the international market for Kenyan products
and to diversify the exports of the country.
The main functions of KETA are;
✓ Marketing of Kenyan products in foreign markets.
✓ Advising manufactures how to improve the quality of their products in order to get
bigger market overseas.
✓ Arranging the trade fairs and exhibitions in foreign countries to introduce Kenyan
activities on export matters.
✓ Providing training activities on export matters.
✓ Encouraging production and marketing of handicrafts.
✓ Providing trade facilities on the matter of freight information and negotiate with
transport companies on behalf of exporters.
✓ Publishing and providing information on the possibilities of the expansion of exports.
Kenya national trading corporation
Was established in 1965 as a subsidiary of ICDC. It was originally responsible for the distribution
of about 40 essential commodities. Currently, the corporation has monopoly in the distribution
of sugar and salt only.
The corporation also exports various local agricultural products and manufactured goods
Kenya bureau of standards
Was established in 1973.
Its functions are;
✓ Ensures high quality of goods produced by manufactures.
✓ To examine the goods produced by different manufactures by taking random samples.
✓ To take appropriate action against the manufactures who produce inferior goods.
KEBS sets standards for goods produced locally or imported from other countries. These are
determined in terms of quantity, weight and mixture. These manufactures whose goods are
approved by KEBS, print a standardization mark on their products.
This ensures production of highly standardized goods. The main disadvantage is that KEBS has
not been able to control the manufacturing sector.
Kenya tourist Development Corporation
Was established by the Kenya government to promote the tourist industry of Kenya. Tourism is
the main source of foreign exchange in Kenya.
The main objectives are;
✓ To provide assistance for establishment of tourism projects.
✓ To provide financial assistance for the establishment of hotels and lodges.
✓ To provide equity finance on joint ventures basis with international hotel organization.

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