Faulu’s Sh3 Billion Facility to SMEs for Growth

Faulu Microfinance Bank plans to loan out about Sh3 billion to SMEs, agribusinesses, chamas and customer groups. These loans are meant to help them recover and grow after the Covid-19 economic turmoil.

This includes the lender’s Sh500 million trade finance facility, which primarily targets larger SMEs in construction, trade, agribusiness and import business. 

Faulu is scaling up its financial support to it’s clients covering 150,000 customers across the country. Its main target is micro, small and medium enterprises, agribusinesses and business groups.  

“Our goal is to help small businesses who form the bulk of our customer base to recover after having endured a difficult period. SMEs not only need financial support to get back their footing but also financial education and motivation to sustain a growth trajectory,” Apollo Njoroge, Faulu Bank Managing Director and CEO. 

Mr. Njoroge in addition said that small businesses are currently dealing with acute liquidity shortages as economic activity gradually returns to normal, thereby hindering their ability to rebuild and scale up their operations.

He also clarified that the recovery of SMEs is crucial to Faulu’s strategy to increase revenue from this unique market segment, which accounts for the largest portion of its loan book and customer list.

“As a Bank, this is an opportunity to provide financial solutions that address the specific needs of our customers struggling to rebuild their businesses in a challenging environment.”

Faulu Bank acknowledges that  SMEs and business groups also need financial literacy to make the right business choices. 

In line with that, Faulu will arrange seminars where these entrepreneurs will meet experienced entrepreneurs. This is meant for the SME entrepreneurs to learn how they can keep their businesses afloat during tough times. 

Faulu Finance products

The bank is offering several loan products meant to help small businesses take up emerging opportunities. These opportunities are not limited to the local trade but also includes international trade.

Local Service Order

Local Purchase Order

Financing invoice discounting

Tender bonds

Supply chain financing

Performance bonds

Retention bond

Payment guarantee

Customer bonds

“Our trade finance solutions are targeting 7,500 clients in the large SME category by providing financial security to help them win contracts and thus expand beyond recovery. For the micro-enterprises and business groups that borrow by members guaranteeing each other, we have several flexible loan products.”

Learning institutions will also benefit from Faulu providing financing to buy more buses so as to comply with social distancing rules.

The Bank will also train its SME customers on how to grow their businesses and strengthen financial risk management. 

Faulu embarked on a strategic plan to grow its brand presence and it’s reach in the counties in 2019. Additionally, it is enhancing its mobile platform for its customers to experience efficient financial services/transactions.