Amica Sacco receives Sh300m loan from KDC to support businesses affected by Covid

Murang’a-based Amica Sacco has received a Sh300 million loan from the Kenya Development Corporation to support local businesses.

The loan is part of the Sh8 billion Supporting Access to Finance and Enterprise Recovery Project, a post-COVID-19 recovery programme funded by the World Bank which was put in place to assist businesses adversely affected by the pandemic.

Norah Ratemo, the corporation’s director general, said the programme, launched early this year, will benefit tier one and two Saccos, and tier three banks focused on lending to Micro, Small and Medium enterprises.

Ratemo, who spoke at the Sacco’s headquarters in Murang’a town, said KDC received 41 applications worth Sh15 billion.

“This programme is aimed at supporting businesses out of the financial stress occasioned by the Covid-19 pandemic, only that it has delayed a bit,” she said.

Ratemo confirmed that the programme will benefit all 47 counties and that Kiambu, Kirinyaga and Baringo had previously been supported.

The national treasury has established a co-guarantee fund to enable financial institutions to provide cheaper loans with reduced collaterals.

The financial institutions and benefiting businesses will also be provided with technical assistance focused on building resilience capacity within the MSME finance ecosystem beyond the lifecycle of the SAFER project.

“The government has already identified various value chains that will benefit from the kitty such as dairy, tea, coffee and avocados for Murang’a county,” she said, praising Amica Sacco for its solid assets base.

Trade Cabinet Secretary Salim Mvurya said there are over 7.1 million MSMEs in the country that are crucial drivers of job creation and productivity.

To unlock their potential, however, the CS said the MSMEs urgently need access to credit in order to propel economic growth and promote prosperity of the country.

“Before this administration, the President went around the country holding economic forums and the issue of access to affordable credit was raised by all”.

He said the financial support will enable businesses to expand their operations, enhance their efficiency and achieve sustainable growth.

“In the wake of Covid-19 pandemic, MSMEs struggled to sustain their operations and support employees. Their recovery is crucial to the overall economic health of the country,” he added.

He said the Sh300 million facility issued to Amica sacco will enable it to provide tailor-made financial services unique to local needs and provide a lifeline for many businesses in Murang’a County.

The sacco, he said, has been a cornerstone of economic empowerment in the county and that it will further drive the local economy by helping struggling businesses to thrive through accessible credit.

“This partnership between Amica Sacco and KDC exemplifies the successful collaboration between the public and private sectors to achieve a shared objective. Our support for MSMEs is a key pillar of our Bottom-UP Economic Agenda aimed at ensuring all individuals contribute to economic growth”.

Amica CEO James Mbui on his part noted that many businesses defaulted on loans during the pandemic following the economic shutdown that followed the lock-downs.

Worst hit, he noted, was the hospitality industry while the global lockdowns affected exportation of agricultural products.

Mbui said the loan will go a long way in strengthening local businesses and urged members to apply.

“About 55 percent of our loans go to MSMEs while about 35 percent go to farmers. Let members apply for loans as long as they comply to the social and environmental requirements of the programme”.

Governor Irungu Kang’ata on his part underscored the partnership his administration has with the sacco that includes the implementation of the Inua Mkulima programme that sees dairy and mango farmers get subsidies.

“We have a huge payroll of about Sh350 million every month to about 5,000 workers and have been experiencing delays in disbursements of revenue,” he said.

Kang’ata said the sacco ensures county workers who are members are paid at the beginning of every month despite delays in disbursement of funds by the national treasury.

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