KCB gets Sh2.6b loan for lending to SMEs

By JAMES ANYANZWA

KENYA: Kenya Commercial Bank (KCB) has received a loan of $30 million (Sh2.58b) from Ghana International Bank.

Group Chief Executive Joshua Oigara said KCB would utilise the loan to increase its lending support through foreign currency reserves to small and medium-sized enterprises (SMEs), micro enterprises and the mortgage market.

He said the financial instiution would also use the three-year loan facility to increase its lending portfolio in Kenya and through its subsidiaries in Tanzania, South Sudan, Uganda, Rwanda and Burundi.

“Currently as the world is eyeing the Africa market, we are witnessing an increasing demand for foreign currency lending, especially amongst the local SMEs who are both regional and global business players,” he said.

Demand for dollars

“The SMEs continue to demand for dollars to facilitate their business needs,” he added.

Oigara was speaking during the signing ceremony of the loan agreement at the bank’s head office in Nairobi yesterday.

He noted that lending in dollar terms would help SMEs to easily borrow for their trade financing, ease their import and export procedures and insulate them against regional currency fluctuations.

Oigara said the loan would boost KCB’s efforts to fully support the SME market segment that has the potential for growth, development and job creation in regional economies.

“In addition the financial inclusion agenda will be well served through our youth, women, the disadvantaged and agency banking which form the bulk of the micro entrepreneurship sectors,” said Oigara.

He observed that SMEs constitute a fundamental part of the economic fabric in East Africa and they play a crucial role in fostering growth, innovation, and prosperity as well as being the

Ghana International Bank Chief Executive Joe Mensah said the financial institution decided to join hands with KCB because foreign currency lending is becoming relevant in Africa.

“It is becoming important in supporting international trade and other foreign currency dealings whose demand is growing,” he added.

In 2011, KCB also secured a $105 million credit facility from the International Finance Corporation for the SME and micro enterprise segment.

Despite their great contribution and numerous policy prescriptions, SMEs still encounter challenges and constraints that inhibit theirgrowth, among them lack of financial access.