Kenya: Stanbic Bank receives KSh1 billion from AGF to support SMEs

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  • Stanbic Bank Kenya and the African Guarantee Fund for Small & Medium-sized Enterprises (AGF) have signed a Loan Portfolio Guarantee Facility to increase financing for SMEs
  • The Portfolio Guarantee Facility of KES 1 Billion will allow Stanbic Bank Kenya to expand their lending capacity and coverage to SMEs
  • The partnership agreement between Stanbic Bank and African Guarantee Fund targets women-owned businesses, as well as those in the sustainable energy sector

Stanbic Bank Kenya and the African Guarantee Fund for Small & Medium-sized Enterprises (AGF) have signed a Loan Portfolio Guarantee Facility to increase financing for Small and Medium Enterprises (SMEs).

The Portfolio Guarantee Facility of KES 1 Billion will allow Stanbic Bank Kenya to expand their lending capacity and coverage to SMEs.

The Head of Business and Commercial Clients at Stanbic Bank Kenya, Florence Wanja, said they remain committed to solving the holistic needs of their SME client segment and partnering for sustainable growth.

She noted that SMEs contribute over 30% of Kenya’s GDP and 50% of new jobs created annually.

“Therefore, our partnership with the African Guarantee Fund is a significant milestone in contributing to accelerating their growth. As a bank, we are constantly looking for ways to contribute to the growth and development of the country through partnerships in line with our purpose. Kenya is our home, and we drive growth.”

The partnership agreement between Stanbic Bank and African Guarantee Fund targets women-owned businesses, as well as those in the sustainable energy sector. In addition to the financial offering, the guarantee fund will offer technical capacity building to these SME groups. The fund is expected to impact thousands of SMEs across the country in the next 5years.

Speaking on behalf of the African Guarantee Fund, the Group Director of Business Development, Franck Adjagba said, “Our partnership with Stanbic Bank marks yet another milestone in our journey in empowering SMEs in recognition of the pivotal role that they play in economic development, innovation, and job creation.”

Many Kenyan SMEs struggle to access financing due to their perceived higher risk, which has further deteriorated during the COVID-19 pandemic. Reducing this risk will help these businesses access the financing required for growth. We are pleased to partner with Stanbic Bank as it expands its lending to SMEs, including Women-led and climate-focused SMEs.”

AGF to support banks in Kenya working with SMEs

Stanbic bank’s investments in financial inclusion are underpinned by the bank’s purpose of driving the country’s economic growth and are further aligned to Social, Economic and Environmental (SEE) impact areas. In doing so, the bank has successfully rolled out several initiatives to empower SMEs on various fronts.

By supporting businesses during a challenging operating environment brought on by the COVID-19 pandemic, Stanbic was among the first banks to restructure loans and issue moratoriums to 7,203 clients. These restructured loans were worth Ksh 40 billion, of which Ksh 3.1 billion went to SMEs. In addition, Stanbic Bank has collaborated with the Ministry of Industrialization and Enterprise Development to launch the FutureNiDigital campaign that has successfully equipped 50,807 businesses and individuals with digital skills.

The bank has similarly supported and empowered women consistently through the DADA proposition, which provides women with financial and non-financial support. In addition, Stanbic Bank partnered with the United States African Development Foundation (USADF) to provide small businesses with access to markets and affordable financing while exposing them to digital technologies through a joint Ksh 1billion grant fund and has so far issued Ksh 33million to MSMEs, cooperatives and producer groups in Kenya to help them grow their businesses.

Wanja also noted that the bank’s partnership with the AGF aligns with their It Can Be brand promise, which seeks to empower individuals and help them achieve their goals.

The African Guarantee Fund is indeed the missing middle that bridges the gap for SMEs across the continent to enable them to access the required financing for their growth. In Kenya, AGF has unlocked financing worth USD 200 million, impacting more than 4,000 businesses.

French Development Agency provides $30 million for African SMEs

Wanjiku Njuguna is a Kenyan-based business reporter with experience of more than eight years.

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