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NBK signs Sh1.13 billion agreement to finance SMEs

National Bank of Kenya (NBK) has joined forces with African Guarantee Fund (AGF) in offering a partial guarantee, concerning disregards arising from loans to various Small and Medium Enterprises (SMES) in Water, Sanitation and Hygiene sector, Women-led businesses and Green Financing in Kenya.

The partnership, which is approximately Sh1.13 billion, aims to strengthen NBK’s guarantee to facilitate the promotion, growth and development of SMES in the water, sanitation and hygiene sector.

Speaking at the partnership launch, National Bank of Kenya (NBK) Managing Director Peter Kioko noted that the guarantee facility will go a long way in alleviating the challenge of access to affordable credit.

“This strategic partnership will enable our SME customers in the targeted sectors to overcome financing barriers in their day to day financial needs and therefore, unlock opportunities to spur growth,” said Kioko, adding that the guarantee facility will see AGF share the risks envisioned by the bank in situations where SME clients are unable to meet collateral threshold requirements.

He further added that NBK has a solid track record of supporting SMES in Kenya and with the partnership they will increase the number of SMES they finance and also pay special focus to women entrepreneurs to facilitate their growth.

Also present during the launch, African Guarantee Fund (AGK) Chief Executive Officer (CEO), Jules Ngankam said that by expanding access to finance for SMES in the water, sanitation and hygiene sectors, the partnership will better the lives and health of Kenyans through increased access to safe hygienic and sanitation facilities.

“Our partnership with NBK is a boost to Kenya’s target of universal access to water, sanitation and hygienic services and a step towards achieving the goal of ensuring access to water and sanitation for all,” he said.

The CEO noted that the guarantee builds on the foundational work of the bank’s MajiKonnect financing programme for the water, sanitation and hygiene sector towards SMEs, Corporates and Water Service Providers.

“MajiKonnect which was launched last year in partnership with Aqua for All, aims at improving access to affordable water and sanitation,” he added.

Ngankam further noted that qualified borrowers must be SMEs, licensed SMEs domiciled in Kenya and must represent a new or incremental business in the water, sanitation and hygiene sector, geared towards investments designed to encourage the growth of the borrower.

By Edna Okoth and Irene Mwende

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