National Bank of Kenya (NBK) has signed a Sh1.1billion partnership with the Africa Guarantee Fund (AGF) for lending to SMEs.
They are targeting those in the water, sanitation, and hygiene (WASH) sector, women-led businesses and green financing in Kenya.
The seven-year tenor guarantee will cover up to 50 per cent of collateral needs for a qualifying facility, with 75 per cent cover for women and green SMEs.
The portfolio will also see the maximum cover for any borrower capped at Sh100 million.
Speaking during the signing ceremony, National Bank’s acting managing director Peter Kioko, noted that the guarantee facility will be essential in mitigating the challenge of access to affordable credit with favourable terms.
He noted that lack of access to finance is a major challenge to SMEs in the WASH sector and women-led enterprises face in aims to scale up their businesses.
“This strategic partnership will enable our SMEs customers in the targeted sector overcome the financing barrier in their day-to-day management needs and therefore, unlock opportunities to spur growth,” Kioko said.
AGF CEO Jules Ngankam said that through expanding access to finance for SMEs in the WASH sector, it would be guarantee in improving the lives and health of Kenyans.
This will be through increased access to safe hygienic and sanitation facilities.
“We will also particularly support green SME projects and Women-led businesses that are at the helm of water and sanitation. Overall, our partnership with National Bank is a boost to Kenya’s target of universal access to water, sanitation and hygiene services,” Ngankam said.
He further notes that this could also be an ultimate step towards achieving the UN Sustainable Development Goal six of ensuring access to water and sanitation for all.
Qualifying borrowers must be Micro, Small and Medium-sized Enterprises (MSME) eligible for credit facilities from the National Bank of Kenya.
They should also be registered, licensed and domiciled in Kenya and must represent new or incremental business in the WASH sector geared towards investments.
