Hundreds to lose jobs after Kenya unveils plan to merge six parastatals into one mega bank

Hundreds of Kenyans risk losing their jobs after the government announced plans to merge six State-owned financial corporations into one in a move aimed at eliminating overlapping roles and streamlined public institutions.

Head of Public Service Joseph Kinyua announced on Monday that the Kenya Industrial Estates, Uwezo Fund, Youth Enterprise Development Fund, Women Enterprise Development Fund, Development Bank of Kenya and IDB Capital Limited are set to be merged into one mega bank.

“The merger will provide a one-stop shop for subsidised loans…attract and facilitate investments…support SMEs develop linkages with large enterprises,” Mr Kinyua said in a circular to affected agencies.

All the above agencies offer financing at different levels, and the move to merge them is set create overlapping roles across all cadres of staff, pointing at likely job cuts.

The impending consolidation is in line with recommendations of a 2013 report by a parastatal reforms taskforce appointed by President Uhuru Kenyatta.

“All the staff serving in State agencies being merged shall be presumed to be staff of the new government owned entity,” the taskforce, which was formed to shake-up the parastatals, advised in its report.

“Any staff found not fitting in the establishment structure may be redeployed elsewhere in the public service or be off-loaded in the normal manner,” it added.

Kenya Industrial Estates which has a staff count of 270 spread across 37 branches in the country and conceptualised to offer financing and business development services to small scale and micro enterprises across the country for instance serves a similar purposes as the Uwezo Fund, Youth Enterprise Development Fund and the Women Enterprise Development Fund, with the target financee being the only differentiator.

The government now intends to merge them to achieve increased efficiency, resolve overlaps and make better use of State resources to achieve economies of scale.

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