KAM Chairman Mucai Kunyiha at a past event
KAM Chairman Mucai Kunyiha at a past event

A new credit information sharing mechanism by the Kenya Association of Manufacturers (KAM) and the Association of Kenya Suppliers (AKS) will, among other things, allow suppliers to blacklist retailers who default on payments.

Numerous suppliers have been driven to financial ruin thanks to non-payment for deliveries, with major retailers a common culprit.

Nakumatt, Uchumi and, most recently, Tuskys, have all sagged under the weight of multi-billion shilling debts owed to suppliers, and the associated legal battles.

According to KAM, the Industry Credit Group (ICG), to be managed by Veri-Credit, will also curb the trend of retailers moving to a different supplier after defaulting on payment to another.

KAM Chairman Mucai Kunyiha

“We found, overtime, that there are notorious bad payers who will take (stock) from one manufacturer, spoil that credit then move to another and repeat the same, and because of competition pressures people keep giving merchandise.

“In some sectors, especially in retail segment, what we have seen is that when they go bad, a lot of money has already been put in because people thought they were gaining market share and didn’t know what was going on at the background,” KAM Chairman Muchai Kunyiha noted.

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Members of KAM and ASK will be able to access data from the Industry Credit Group (ICG).

At the moment, Tuskys, once one of Kenya’s biggest retailers, is grappling with empty shelves amid demands from unpaid suppliers.

The supermarket chain has shut down several branches as part of a turn-around plan. In October, Tuskys closed Tuskys Pioneer on Moi Avenue Street in Nairobi, Adams Arcade branch on Ngong Road, and its Kitengela store located two kilometres from Namanga.

The supermarket also shut down its Ronald Ngala branch in the Nairobi Central Business District and its Shiloah branch in Kakamega.

In other branches such as the K-Mall branch in Komarock and the Hakati branch in Nairobi, operations have been halted.

The supermarket had lined up a series of meetings with creditors in a bid to find agreements to support the turn-around plan.

The plan is hinged on  the retailer securing a Ksh.2.1 billion debt facility from an offshore Mauritius based private fund.

READ>>>>>Relief for Tuskys as Court Stops Creditors From Auctioning Retailer’s Assets

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Martin Siele is a senior reporter at Business Today.

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