Members of the Departmental Committee on Trade, Industry and Cooperatives have demanded clarity over delays in the proposed merger of key affirmative action funds, warning that continued uncertainty could undermine efforts to streamline financing for small businesses.
The lawmakers urged the Ministry of Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Development to fast-track the consolidation of the Uwezo Fund, Youth Enterprise Development Fund, and Women Enterprise Fund into a single entity.
Push for biashara fund
Committee Chairperson Hon. Bernard Shinali (Ikolomani) said the planned merger into the Biashara Fund would simplify access to credit for women, youth and other marginalized groups while sealing loopholes that have led to misuse and duplication.
The issue arose during deliberations on the 2026 Budget Policy Statement for the ministry. Lawmakers questioned why additional allocations were being proposed for one of the funds despite earlier assurances that consolidation was imminent.
“You have been on record saying the funds will be merged. What is the status? Why allocate more money to the Uwezo Fund when there is a plan to merge it with other funds?” Hon. Shinali posed.
Committee Vice Chairperson Hon. Marianne Kitany (Aldai) joined members in pressing for a clear timeline, signaling growing impatience within Parliament over the slow pace of reform.
Funding requests raise questions
The concerns followed a disclosure by Cabinet Secretary Hon. Wycliffe Oparanya that the Uwezo Fund requires an additional Sh600 million. Of this, Sh400 million has been earmarked for the Labour Mobility (Wezesha Majuu) programme, while the remaining Sh200 million is intended to support the Women’s Economic Empowerment project.
The proposal sparked debate among MPs, who questioned the rationale of injecting more funds into a structure slated for dissolution. Some members argued that proceeding with fresh allocations before completing the merger could complicate the transition process.
In response, CS Oparanya maintained that the consolidation plan remains firmly on course. He assured the committee that the ministry would not abandon the reform agenda and promised to provide a detailed update on the status of the merger.
“We will not backtrack on consolidating the funds. This is the only way to ensure a more efficient, transparent and impactful financial support system for small businesses. It will simplify access, reduce bureaucracy and prevent duplication,” he said.
Billions in budget gaps
Beyond the merger, the ministry revealed significant funding shortfalls that could affect the rollout of key programmes in the upcoming financial year.
According to the CS, the State Department for MSMEs Development faces a funding gap of Sh12.417 billion. Meanwhile, the State Department for Cooperatives has a deficit of approximately Sh7.816 billion.
“These funding gaps are substantial and will greatly limit the implementation of key programmes if not addressed,” CS Oparanya told the committee.
He appealed to lawmakers to support the ministry in bridging the shortfalls, arguing that adequate funding is critical to accelerating national economic transformation, particularly in the MSME sector which employs millions of Kenyans.
Reform versus urgency
The planned Biashara Fund is designed to create a unified, transparent and more accountable framework for disbursing affirmative action financing. By merging the three funds, the government aims to eliminate cases where individuals benefit multiple times from separate schemes while improving oversight and resource allocation.
However, Monday’s session underscored the tension between long-term reform and immediate financial needs. As Parliament scrutinizes the 2026 Budget Policy Statement, lawmakers appear keen to ensure that transitional arrangements do not weaken service delivery to vulnerable groups.
With billions of shillings in funding gaps and critical empowerment programmes hanging in the balance, the committee signaled that it will continue pressing the ministry for clear timelines and accountability on the merger process.
The coming weeks are likely to determine whether the Biashara Fund moves from policy pronouncement to legislative and operational reality.
