The KCB Bank has entered into a credit guarantee agreement with Nakuru County that will see the lender give Kes800 million in loans to thousands of Micro, Small, and Medium Enterprises (MSMEs) to help them shake off the effects of the pandemic.
In the deal, the county government has set aside Kes52 million that will be used as interest subsidy and credit guarantee for the benefiting SMEs.
Further, the devolved government will pay part of the interest (5 percent) while business owners and or cooperative societies will pay the balance of 7.5 percent.
“We are deliberate in our effort to be the ‘partner kwa ground’ for support towards MSMEs across the country. We believe that the support given will go long way to benefit the livelihoods of our people and our economy as a whole,” said KCB Bank Director Retail Annastacia Kimtai.
She added: “The interest-sharing and guarantee model is one of the innovative ways the bank has developed to facilitate credit to catalyze the business growth of the entrepreneurs and enable economic recovery. We know that small businesses are most at risk from the economic disruption posed by the global outbreak of coronavirus It is only through strategic partnerships including with county governments that we can support businesses to weather this crisis.”
This pandemic recovery financing plan targets existing MSMEs in Nakuru County where entrepreneurs will be financed according to their ability to pay based on their cash flows.
Last year, the regional lender partnered with various counties in providing lending to MSMEs under interest subsidy and credit guarantee scheme cushion them from economic fallout triggered by COVID 19.
“We are keen on this partnership as it speaks directly to the core of our economy- MSMEs. The country is aligned to the fact that this segment is what drives the economy and therefore requires to be fully supported,” said Nakuru County Governor Lee Kinyanjui.
Beyond the funding, KCB will also support entrepreneurs through its social investment arm KCB Foundation where through the 2iajiri programme, it will provide youths with skills training and business development support to grow their businesses.