KCB Bank Kenya has set aside Kshs.800 million to support thousands of micro, small and medium enterprises (MSMEs) and cooperatives in Nakuru County weather the effects of the Covid-19 pandemic. This follows the signing of a partnership agreement between the county government of Nakuru and the bank.
Under the arrangement, KCB will provide affordable facilities to enterprises and cooperative societies whose businesses have been affected by the pandemic. In the arrangement, the county government has set aside Kshs.52 million as interest subsidy and credit guarantee. In this case, the government will pay part of the interest (5%) while business owners and cooperative societies will pay the balance of 7.5%.
“We want to support the businesses as they push for recovery from the effects of the pandemic. We believe that the support given will go a long way in benefiting the livelihoods of our people and our economy as a whole,” said KCB Bank director of retail, Anastasia Kimtai.
“The interest sharing and guarantee model is one of the innovative ways the bank has developed to facilitate credit to catalyze the business growth of the entrepreneurs and enable economic recovery. We know that small businesses are mostly at risk from the economic disruption posed by the global outbreak of corona virus,” she added.
This fund targets MSMEs in Nakuru County where entrepreneurs will be financed according to their ability to pay based on their cash flows.
Last year, KCB partnered with various counties in lending to MSMEs under interest subsidy and credit guarantee to cushion them from effects of Covid- 19.
Lee Kinyanjui, Governor, Nakuru County said: “We are keen on this partnership as it speaks directly to the core of our economy- MSMEs. The country is aligned to the fact that this segment is what mainly drives the economy and therefore requires to be fully supported”. Beyond the funding, KCB will also support entrepreneurs through KCB Foundation (its social investment arm) where through the 2iajiri programme; it will provide youths with skills training and business development support to grow their enterprises.
In 2020 , at the height of the pandemic, KCB signed a partnership agreement with World Bank’s International Finance Corporation (IFC) as lead syndicator to scale up lending to MSMEs and women-owned businesses.