NAIROBI, Kenya, Feb 21 – Absa Bank Kenya Plc Monday signed an Sh1.25 billion Loan Portfolio Guarantee Facility with the African Guarantee Fund (AGF) to boost credit accessibility for local small businesses, including start-ups.
Under the deal which will be in place for 5 years, a borrower can access up to Shs100 million in a single limit.
To qualify for funding, targeted businesses must represent new or incremental business only geared towards investments and/or working capital for growth with green and women in business enterprises accessing up to 75 percent cover.
Other businesses which are not green- and women-related will receive up to 50percent of cover.
Speaking at the signing ceremony, Absa Bank Kenya Managing Director Jeremy Awori said the partnership is aimed at reducing poverty and reducing inequality by ensuring financing access among the SMEs.
“Considering the financing gap experienced by most SMEs due to their risk profile and lack of security, the bank is always exploring innovative ways to mitigate possible risks in this segment and at the same time tap into the huge opportunity within this growth sector and driver of our economy,” Mr. Awori said.
On his part, African Guarantee Fund Group CEO Jules Ngankam said the organization’s objective is to enable SMEs to play their role of being the engine driving economic growth.
“By closing the greatest obstacle, which is the financing gap, AGF enables SMEs to increase sustainable growth and to be a source of employment, skills, and wealth creation. In turn, this serves to reduce poverty throughout the continent.
In addition, the businesses will be able to benefit from training on managerial capabilities in areas such as governance, human capital management, quality control, packaging, financial management, and marketing.
