Sh1 billion credit facility set to benefit women-led SMEs

The African Guarantee Fund has granted Stanbic Bank Kenya a Shs 1 billion loan portfolio guarantee facility, which will help Kenyan small and micro businesses (AGF).

In the next five years, the facility, which focuses on women-owned firms and those in the sustainable energy sector, is projected to affect thousands of SMEs across the country.

In addition to cash assistance, the guarantee fund will provide technical assistance to these SMEs.

“Many Kenyan SMEs struggle to access financing due to their perceived higher risk, which has further deteriorated during the COVID-19 pandemic. Reducing this risk will help these businesses access the financing required for growth. We are pleased to partner with Stanbic Bank as it expands its lending to SMEs including Women-led and climate-focused SMEs,” African Guarantee Fund’s group director of business development, Franck Adjagba.

Because the objective of this cooperation is to share the risk that the bank would incur by lending, the SMEs will be able to obtain loans from the bank.

Stanbic Bank is devoted to meeting the overall needs of its SME clients and partnering for long-term success.

“SMEs contribute more than 30 percent of Kenya’s Gross Domestic Product, and close to 50 percent of new jobs created annually. Our partnership with the African Guarantee Fund is a significant milestone in contributing to accelerating their growth,” Stanbic Bank’s head of business and commercial clients, Florence Wanja.

Wanja further stated that the bank’s collaboration with the AGF is in keeping with the bank’s It Can Be brand promise, which aims to empower people and assist them in achieving their goals.

With this facility, Stanbic will be able to lend credit to higher-risk SMEs as they will be able to use a visa mitigation tool based on the agreement we signed. The guarantee facility only provides liquidity loans at standard banking rates, so that if the SMEs default, the bank will be supported by the guarantee fund.