NAIROBI, Kenya, Nov 8 – The National Bank of Kenya (NBK) has signed an agreement with the Africa Guarantee Fund (AGF) to secure loans issued to small businesses of up to Sh1.1 billion if they default.
Sectors targeted include water, sanitation, and hygiene (WASH) as well as women-led businesses and green financing.
The 7-year tenor guarantee will cover up to 50 per cent of collateral needs for a qualifying facility with 75 per cent cover for Women and Green SMEs; and will see the maximum cover for any borrower capped at Sh100million.
NBK Managing Director Peter Kioko has hailed the partnership terming it a boost to the bank’s efforts to facilitate access to clean water and environmentally friendly energy.
“We will be able to structure a credit sharing of between 50 and 70 per cent that will focus on water sanitation, women-led enterprises, and green financing. This partnership is a testament that NBK can do business that adds value to the community,” said Kioko.
AGF Group CEO Julius Ngankam has reiterated the organization’s commitment to accelerating the growth of MSMEs through enabling credit access.
Ngankam noted that the growth of most green enterprises is curtailed by stringent conditions to access financing, a challenge that its deal with NBK aims to alleviate.
“This partnership means a lot to us. It is a big step to bringing more support to SMEs and Communities. The SMEs will get a longer payment period of upto10 years which is rare in the normal banking arrangement” he said.
Ngankam has also urged lenders to look beyond the bottom line and engage in programs that will serve the community they operate in.
