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The facility under the NASIRA program, will strengthen Sidian Bank’s ability to provide financing to MSMEs affected by the COVID-19 crisis in Kenya.


Sidian Bank re-opens lending to un-banked SMEs

The SME and Trade Finance-focused lender said the rate caps had locked out thousands of small businesses from the loans market, negatively impacting on economic growth/Sidian Bank

NAIROBI, Kenya, Nov 12 – Sidian Bank has assured current customers that the cost of their outstanding loans will not be varied while calling on unbanked SMEs to take advantage of the removal of the rate cap to resume borrowing.

The SME and Trade Finance-focused lender said the rate caps had locked out thousands of small businesses from the loans market, negatively impacting on economic growth.

Sidian Chief Executive Officer Chege Thumbi on Tuesday said the removal of the rate cap has made SMEs bankable once again.

“We have seen a lot of interest from new and old customers who want to re-open credit lines with us, what we’re telling them is that we’re now open to finance their growth and expansion plans. Old customers will continue servicing their loans at the old rates with no change in terms,” said Thumbi.

Sidian Bank supports SMEs through innovative solutions in Trade Finance in form of bid bonds, performance guarantees, advance payment guarantees, local and foreign letters of credit, invoice discounting, contract financing, LPO financing, and supplier financing.

The trade finance solutions allow customers to execute the projects and or do business without the need to large funded loans.

This focus has seen the bank grow the Trade Finance loan book from Sh1B in 2017 to Sh16B by early 2019.

“Removal of caps means that the bank has an opportunity to adequately price loans for customers who were considered riskier in the interest cap regime,” he added.

Sidian Bank’s current average loan size ranges between KSh3.5 and 5 Million, which confirms that the bank is focused on small and medium entrepreneurs.

“This average has grown from Sh2Million in 2017. That growth is attributed to Trade Finance and therefore the bank can easily double the disbursements with the removal of the caps,” said Thumbi.

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