NIC Bank Kenya has signed a Sh515.9 million loan guarantee agreement with African Guarantee to facilitate the growth of the Small and Medium-sized Enterprises (SMEs).
During the partnership launch on Friday, AGF Group Deputy Chief Executive Officer, Jules Ngankam said the objective of the partnership is to provide partial credit guarantees and capacity development to NIC Bank to stimulate financing of SMEs.
“With this partnership, we are going to increase access to finance for more SMEs. This will mean more job creation and revenue generation which directly aligns with AGF’s mission of catalysing economic growth and poverty reduction in Africa. AGF is proud to have partnered with a bank that has a vision for SMEs and believes in their potential to spur the growth of this country,” said Ngankam.
SMEs in Kenya, like in other African countries, face major challenges when seeking financing to expand and grow their businesses. Recent studies have shown that SMEs employ 14.9 million Kenyans and contribute 28 per cent to the Gross Domestic Product.
Data from Kenya National Bureau of Statistics indicate that most SMEs do not get to celebrate their third anniversary because 46 per cent collapse within their first year while 400,000 fold-up within their second anniversary.
Chiuri reaffirmed the bank’s position to be the leader in offering financing solutions backed by uniquely competent trade and relationship management experts, wide correspondent banking network and a unique ability to handle risk management.
“We support our trade finance customers with innovative products and services and specialist expertise in sectors like agribusiness, manufacturing, trading, health, transport and communication,” said NIC Bank corporate director Ellie Chiuri.