Faulu Bank launched nationwide business community interactions with the goal of assisting SMEs to strengthen their companies through access to bank finance.
SMEs account for over 98 percent of all enterprises in Kenya and for roughly 80 percent of all jobs, contributing significantly to the country’s economy.
The industry also makes up 33.3% of GDP. However, although they make a significant contribution to economic growth, they nevertheless face many difficulties, including obtaining financing.
The importance of SMEs in the nation’s economy cannot be understated, Faulu managing director Apollo Njoroge said during the first SME forum conducted in Thika.
“SMEs play a pivotal role in job creation and contribute up to 8 percent to the GDP. It is because of this that we saw it fit to diversify our portfolio as a bank,” Njoroge.
The bank recently updated its trade credit options to help our SMEs with both domestic and international trade and commerce.
Bid bonds, performance bonds, and advance payment guarantees are a few of the items that have been examined.
Microfinance will look for strategic alliances with credible underwriters in order to lower the risk exposure for the SMEs.
In Kenya, commercial banks control 95% of the SME portfolio, worth Sh605 billion, whereas microfinance institutions control at least 5%, or Sh33 billion.
In order to provide competitive pricing, flexible collateral, and improved efficiency for the 7.4 million SMEs in the nation, the bank evaluated its Trade Finance Offering.
The addition of unsecured performance bond restrictions and the case-by-case evaluation of agent commission discounts are two of the major modifications made by these offerings.
The regional forums were planned to take place in six to ten counties until the end of the year; they have already been carried out in Thika and Nakuru.