SBM Bank Kenya has signed an agreement with African Guarantee Fund (AGF) amounting to USD 10,000,000 aimed at increasing its financing of Micro, Small and Medium-sized Enterprises (MSMEs).
The facility, in form of a risk-sharing arrangement, will unlock opportunities for the MSMEs in addition to supporting the green space and women-led enterprises to access credit on favourable terms, mitigating the challenges they experience in scaling up their businesses and increasing their contribution to wealth creation and job opportunities.
Speaking during the signing ceremony, SBM Bank Kenya Limited CEO, Moezz Mir said, “Considering the financial hurdles experienced by most SMEs due to their risk profile and lack of security, SBM is always exploring innovative ways to mitigate possible risks in this sector and help SMEs overcome this challenge.’’
Moezz Mir has also confirmed that they have no plans to sell their Kenyan operations which have a total asset base of KES 84.2 billion as at 30th June 2022 compared to KES 70.7 billion as at 31st December 2018 after the acquisition of Chase Bank in receivership.
The bank currently has very strong liquidity despite inheriting legacy liabilities when it acquired two failed banks in Kenya.
The bank’S liquidity position stands at 53 per cent as at June 30, 2022, way above the 20 per cent statutory minimum liquidity ratio that the Central Bank of Kenya (CBK) requires commercial banks to hold.
The strong liquidity position is supported by investment in government securities totalling KES 37.3 billion.
African Guarantee Fund Group CEO, Jules Ngankam ascertained that the partnership with SBM Bank will empower SMEs to play their pivotal role in economic development, innovation, and job creation in Kenya.
“Our guarantee 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. This will equip SMEs with appropriate financial management capabilities and boost their credit threshold requirements.” said Mr. Ngankam
“Additionally, this partnership will on the one hand empower women entrepreneurs through our AFAWA Guarantee for Growth product, and on the other hand foster sustainable growth by increasing financing of climate-focused SMEs through our Green Guarantee facility.” added Mr. Ngankam.
In the last few years, SBM has taken a prudent approach to SME empowerment especially for the post-pandemic period, in which business owners are trained on business sustainability, fundraising, bookkeeping, and networking to assure profitable operations through individualized propositions and products.
READ; SBM Bank Injects Sh 6 Bn into Chase Bank After Completing Acquisition