KENYA – SBM Bank Kenya, a commercial bank, has inked a risk-sharing agreement with the African Guarantee Fund (AGF) that will see them avail KSh1.2billion (US$9.93m) to women-led businesses and climate-focused Micro Small, and Medium Enterprises (MSMEs) in the country.
The fund seeks to mitigate the challenge of access to affordable credit with favourable terms, a major challenge MSMEs and women-led enterprises face as they aim at scaling up their businesses.
Speaking during the signing of the pact, SBM Bank Kenya Chief Executive Officer Moezz Mir noted that the bank is committed to helping overcome the hurdle by exploring innovative ways of mitigating the financial risks MSMEs face.
“This facility is unique in several ways as it represents an investment, productivity and the acceleration of growth opportunities and realization of the UN sustainable development goals,” said Mir.
He further noted that the agreement is aimed at realizing the bank’s strategic objectives which are anchored around transforming the SME sector, supporting women-led businesses and offering sustainable finance to businesses that focus on clean energy, cleaner production, green services and climate-smart agriculture and natural resource management.
African Guarantee Fund Group CEO Jules Ngankam established that the partnership will empower the SMEs and women-led businesses to play their economic development, innovation, and job creation role in the country.
“Our guaranteed agreement with SBM Bank Kenya is structured to solve the holistic needs of SMEs by not only reducing their perceived risk but also enabling the bank through our Capacity Development initiative to help small businesses ramp up their skills in areas such as leadership, human capital management, technology, financial management and marketing,” said Ngankam.
Moreover, the partnership seeks to advance sustainable growth by increasing financing for SMEs that are climate-focused in addition to empowering women and entrepreneurs through the Affirmative Finance Action for Women in Africa (AFAWA) Guarantee for growth product.
Crown Paints partners I&M Bank
Crown Paints, a paint manufacturer, and I&M Bank, a commercial bank, have inked a deal that will see the lender provide unsecured lending for the paint maker’s dealers for orders of up to KSh10 million (US$82,747).
The listed manufacturer and the tier-one bank said the deal that is targeting small and medium enterprises will provide the dealers with working capital and the facilities will be repaid after 60 days.
The financing package will also be extended to customers for up to KSh500,000 (US$4,137), also repayable after two months, and is open to those who buy paint exclusively from Crown.
Paint customers that are members of Team Kubwa Sacco –Crown Paints’ sacco for painters – will enjoy longer repayment periods of between 12 and 24 months.
“We believe that this solution will go a long way in creating the necessary headroom for our dealers and customers to be able to achieve their business goals,” Crown Paints chief executive Rakesh Rao said.
Team Kubwa Sacco was unveiled in 2020 targeting those on the paint manufacturer’s loyalty programme to help them develop a savings culture.
Under the deal with I&M, Team Kubwa Sacco members will receive loans ranging from KSh150,000 to KSh500,000 (US$4,137).
Mr Rao said the initiative will open credit lines for Crown customers who might have challenges accessing working capital from other financiers.
I&M Bank chief executive Kihara Maina said that driving business growth through various revenue streams is a key strategy for the bank, hence the decision to provide the unsecured credit to Crown Paints dealers and customers.
“We seek to grow the loan book quality and portfolio, by building quality interest-earning assets via partnerships such as these, especially those that support the Micro, small & Medium Enterprises (MSME) segments of our market,” he said.
He added that the stock financing options for Crown Paints dealers will be offered through a digital platform.
In August, Crown Paints said it had moved to stocking raw materials for six months from the previous two that had been the norm on changing supplier demands.
Demand for home improvement products shot up by 20 percent over the past two years on Covid-19 lockdowns that had made people rethink the spaces they work and live in.
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