Absa Bank, AGF Unveil Ksh1.25 Billion Fund to Unlock Credit for SMEs

0
158

Absa Bank Kenya Plc and African Guarantee Fund (AGF) have inked a Ksh1.25 billion Loan Portfolio Guarantee Facility to boost credit accessibility for local small businesses, including start-ups. The guarantee line will be in place for a period of five years and avails up to Ksh100 million in single borrower limit.

The partnership will enable Absa Bank Kenya to help small businesses enhance their business managerial capabilities in areas such as governance, human capital management, quality control, packaging, financial management and marketing. This will assist to scale up SME lending activities in situations where the target SME clients are unable to meet collateral threshold requirements.

Absa Bank Kenya Managing Director Jeremy Awori said the partnership will allow for direct contribution to solving one of the world’s toughest problems of 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.

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 50 percent of cover.

On his part, African Guarantee Fund Group CEO Jules Ngankam said the organisation’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.

LEAVE A REPLY

Please enter your comment!
Please enter your name here