Small and Medium Sized Enterprises (SMEs) in the country got a major boost Friday in their efforts to access credit and support their growth and ambitions.
This comes in the wake of a guarantee scheme jointly launched by Kenya Commercial Bank and the Swedish International Development Cooperation Agency (SIDA).
The introduction of Ksh. 1 billion kitty will enable the bank to strengthen its commitment to financing SMEs that continue to face credit-related challenges.
KCB Bank Acting Director of Retail Banking, Micheal Kung’u noted that the new instrument will enable SMEs to tap into the bank’s expanded portfolio of SME financing options to enable them to contribute to the growth of Kenya’s economy.
“We are excited about this new instrument as it offers us the flexibility to work with SMEs and the refugee population in their ambitions to support the entrepreneurial journey. The SME guarantee will therefore go a long way in diversifying the SME’s financing resources and reducing collateral requirements, thereby enabling them to play a leading role in achieving economic and social development,” said Kung’u
According to the Swedish Ambassador to Kenya Caroline Vicini, in order to support the knowledge gap by lenders, they should use risk-sharing facilities as a tool to broaden the SME lending to mitigate risk and allow them to build capabilities and track records in serving niche markets like SME’s and refuges.
“Sweden’s Development Cooperation through the Swedish International Development Cooperation Agency aims to create opportunities for better living conditions for people living in poverty and under oppression. This initiative will enable Sweden’s engagement to go beyond the official Development Assistance (ODA) and focus more on innovative financing approaches to mobilize domestic resources and external private capital to reach the most vulnerable communities in Kenya,” she said.
