With the enactment of the interest rates’ law and the chaos of an election year which have resulted in a review Bank’s lending policies, it might leave small business owners wondering what the future of access to funding in Kenya might look like.
But worry no more, because Kenyan SMEs are set to benefit from a very innovative financing model by that will empower them to do business with larger corporates under the new Barclays Enterprise & Supply Chain Development (ESD) program.
Through the new ESD solution, Barclays will finance SMEs supplying goods and services to big corporates on the basis of a valid contract, thus enabling them to grow and make a bigger contribution to the economy.
Speaking at the launch today, Barclays Bank Corporate and Investment Banking Director James Agin said;
“One of the unintended consequences of the interest rate capping is that banks have been forced to review their lending policies especially to micro and small enterprises due to the high risk associated with these segments. Through this program, we will not only provide funding for the SME’s within the corporate value chain, but also deploy training for entrepreneurs to support their growth” he said.
The bank has set aside a sizable new fund worth Kshs. 150 million to support the program this year with a provision to increase the amount should there be more demand. SMEs will access the funds through the bank’s existing products including bank guarantees, letters of credit, short term loans, invoice discounting and overdrafts.
Beneficiaries of the program will be identified through the Barclays corporate customers and are not required to be Barclays customers at the on-boarding stage. Further, the small and medium entrepreneurs will enjoy customised non- financial support through workshops & training.
Mr Agin said lending under ESD will leverage the bank’s existing relationship with its corporate customers and beneficiaries will therefore not be required to present their financials and other collaterals to access funding.
