Unemployment is one of the world’s most biting challenges. According to the report by Organisation for Economic Co-operation and Development (OECD) released on 10 November 2022, the unemployment rate in September 2022 was at 4.9% slightly above its lowest point since the start of the series in 2001.
As a primary concern in the present world, one of the answers to this challenge is to increase the number of companies and their sizes in all sectors of the economy and ensure production techniques suits the need and means of the country. It is essential to promote labour-intensive technology to solve the unemployment crisis.
African Talents Are Going Where They Are Rewarded – Vusi Thembekwayo
Norfund, the Norwegian development finance institution, and Ethos Mezzanine partners, a closed-ended specialist’s credit fund, have committed to offering a USD 12.5m each debt investment in Balaji Group, a leading textile manufacturer in Sub-Saharan Africa. Balaji Group textile manufacturers are based in Nairobi. It produces garments for many global brands and retailers which are exported predominantly to the USA.
Norfund and Ethos Mezzanine partners aim at supporting the creation of 6000 new direct jobs and 6000 indirect jobs. According to William Nyaoke, the Regional Director for East Africa in Norfund, contributing to the growth and development of the textile and apparel sector in Kenya will make a significant impact by delivering on their mandate of facilitating job creation at a scale in order to combat poverty.
Balaji Group had already employed over 12,000 people. With the USD 12.5m debt investment, the company intends to hire 6,000 new direct workers and create opportunities for another 6,000 indirect jobs across the value chain with the capital support of Norfund and Ethos Mezzanine partners.
“Ethos Mezzanine Partners provides growth and replacement capital to mid-market businesses across East Africa, the Horn, and Southern Africa. We are excited to partner with the Balaji Group and Norfund to fund the next phase in its growth trajectory that spans 21 years since it was founded by Pankaj and Amit Bedi,” Phillip Myburgh, the Managing Partner of Ethos Mezzanine Partners, said.
“This funding commitment also promotes the UN’s Sustainable Developments Goals 5 (gender equality), 6 (clean water & sanitation), 8 (decent work & economic growth) and 12 (responsible consumption and production)”, Phillip added.
Opinion: Why Most Adults Struggle Financially and Lament over Unanswered Prayers – Andrew Kibe Muita
The investors bring much-needed capital to accelerate the company’s further growth. By financing the replacement of Balaji’s old washing facility with new modern washing machines, its manufacturing capacity will increase by 300%. It will also reduce the amount of electricity used by about 20-30%, water consumption by 70% and chemical use by 60%.
Balaji Group has also already installed a 1.8MW captive solar plant to advance its ambitions of running a more environmentally sustainable operation. The new funding will also enable further investments in sewing machines that will expand production capacity and contribute to increasing the number of garments produced per hour. In addition to the capital injected, the funders aim to support further improvements in the company’s management of environmental, social and governance standards.
“Balaji Group has always been at the forefront of adding value to the entire community around our business, not only our team but their extended families & community at large. We are now more than ever committed to supporting the development of the local supply chain ecosystem around our sector by supporting & and holding MSMEs to be part of the supply chain,” Amit Bedi, Managing Director of the Balaji Group, told the press.
“Our story is one of resilience and commitment to our vision to create a legacy institution in the sector. We are grateful for the opportunity to have worked with Norfund and Ethos Mezzanine Partners, whose core values are developing and improving people’s lives, which is directly aligned with what Balaji’s endeavour is too,” Pankaj Bedi, chairman of the Balaji Group, explained.
Although the textile and apparel sector is a key driver of economic growth in Kenya, it is relatively underdeveloped compared to many Asian economies where it has played a key role in underpinning economic growth and creating new jobs on a large scale. The sector in Kenya has already more than 50000 workers, majority of them being. It remains a potential area of investment for economic growth.
Article by Lydia Achieng’
Email: lydiaachieng@upeohubdigital.co.ke
Follow or like our social media accounts for more informative stories:
Facebook: https://www.facebook.com/UpeoHubDigital
Twitter: https://twitter.com/upeohubnews
LinkedIn: https://linkedin.com/UpeoHubDigital
Instagram: https://www.instagram.com/upeohubdigital
Would you like us to feature your story/opinion? You can contact us through the following:
Cell: +254 759 896907
Email: news@upeohubdigital.co.ke
For corporate engagements, you can reach out to us via info@upeohubdigital.co.ke
For marketing engagements, email us via marketing@upeohubdigital.co.ke
