NIC Bank has signed a KSh516 millions Loan Portfolio Guarantee with the African Guarantee Fund meant to benefit Small and Medium Sized Enterprises in Kenya. The partnership aims to improve access to finance for small businesses in the country.
In Kenya, the small enterprises employ almost 80 per cent of the working population and contribute approximately 28 per cent to the GDP. However, businesses often struggle to get funding. Figures from the Kenya National Bureau of Statistics show that in 2016, up to 400,000 small businesses shut down within the first two years of running and 2.2 million enterprises closed within five years of running mainly due to cash flow problems.
African Guarantee Fund CEO Jules Ngankam noted that the agreement with NIC bank is to offer partial credit guarantee and improve the lender’s capacity to finance small and medium-sized businesses.
“With this partnership, we are going to increase access to finance for SMEs. This will mean more job creation and revenue generation which directly aligns with AGF’s mission of catalyzing economic growth and poverty reduction in Africa. AGF is proud to have partnered with a bank that has a vision for SMEs and believes in their potential to spur the growth of this country,” said Mr. Jules Ngankam.
NIC’s Corporate Director Mr. Ellie Chiuri noted the bank’s position as a leading provider of financing to SMEs. The lender is supported by an extensive network of correspondent banking, trade financing experts, and a unique ability to handle risk.
The agreement between NIC Bank and African Guarantee Fund will improve access to finance for small businesses in Kenya and therefore lead to faster economic growth.
