Small entrepreneurs can access tailored financial products that align with their specific requirements after Faulu Bank enhanced its portfolio, following July’s Ksh900 million cash injection from parent Old Mutual.
The bank now offers comprehensive trade banking products, including savings and investment facilities, digitally-enabled transactions for SMEs and Insurance solutions to safeguard businesses and personal assets against unforeseen risks.
Faulu Bank’s SME accounts are tailored for growing businesses, allowing for frequent transactions and multiple payments through convenient solutions, including RTGS, cheques, direct debits, EFT and standing order, amongst others. These accounts also provide access to foreign exchange services, business loans and overdraft facilities that align with the unique needs of individual businesses.
Many of these services are accessible via Faulu Bank’s enhanced digital solutions like the DigiCash App, Faulu E-banking and Faulu Host to Host, a platform that allows entrepreneurs to make seamless, real-time, and cost-effective transfers between banks and their clients. All these digital facilities empower customers to bank anytime, anywhere, and on any device, through convenient, secure, and user-friendly channels.
Additionally, SMEs that bank with Faulu have access to multiple lending products from its Biashara Micro-secured bouquet of secured and unsecured loans with rapid approvals of 48hours, flexible collateral requirements and adjustable repayment options including84-month term limits. These products are envisaged to support working capital needs, business expansion, trade finance, project finance, bid and performance bonds, letters of guarantee and import/export finance. This is in addition to funding the acquisition of assets and equipment amongst other capex needs.
Moreover, Faulu has a specialized saving and lending product for agribusiness entrepreneurs, which targets farmers of grains, milk, tea and other value chains. Under this product farmers can secure financing to advance their business equivalent to 70percent the value of sales from the previous agricultural season. The bank also works with partners like the United Nations Capital Development Fund, Water.org,the World Health Organization and GIZ, amongst others, in delivering agricultural ecosystem financing products for the acquisition of production resources like irrigation equipment and solar systems. These partnerships are achieved through a de-risking arrangement, which increases the bank’s capacity to lend to many farmers.
To minimize the business risks for entrepreneurs, the bank has several insurance products, including insurance premium financing targeting assets and businesses. These products cover different risks including natural calamities like fires and earthquakes as well as man-made issues like robberies and malicious damage. The Faulu insurance products cover employees, infrastructure, stock, and other business valuables. For example, the Faulu Biashara Flexi Cover protects a company’s employees, while the Contractors All Risk Cover, offers protection against loss or damage to contract works, machinery and plant, as well as third party liability arising from the performance of contracts.
“Small businesses are an important segment of our bank and we are always looking for innovative ways of supporting their growth. With a strengthened capital base, we can now lend more, ensuring that entrepreneurs have everything they need to thrive, ultimately creating more job opportunities for the country’s youth,” said Faulu Bank’s CEO, Julius Ouma.
Faulu Bank’s core objective since inception has been to empower micro, small and medium-sized enterprises (mSMEs) by equipping them with the financial resources needed to thrive. Looking back to 1991, when the bank was established, the acceptable collateral across the lending industry were fundamentally limited to land or vehicle titles, meaning that only a handful of small business owners could access loans and related services.
Faulu came in with a whole new strategy that would see small entrepreneurs get loans against their businesses or co-guarantees with their peers. The model worked, and, today 33 years later, many businesses have grown from struggling establishments to competitive enterprises that employ thousands of people thanks to Faulu’s unwavering support.
“We are out to be a comprehensive banking partner for traders, providing the tools they need to manage and grow their businesses effectively. Our model has been structured against a willingness to take risks, but over time, we have invested in the capacity and technologies that give us the insight we need to see the business opportunity in SMEs. We are really proud to see businesses that would traditionally have failed to attain the next step of growth due to financial limitations rise to conquer markets thanks to Faulu’s support,” said Ouma.
