SBM Bank Kenya has sealed a risk-sharing agreement with the African Guarantee Fund (AGF) amounting to USD 10,000,000, to increase its financing of Micro, Small and Medium-sized Enterprises (MSMEs).
The facility unlocks opportunities for the MSMEs together with transactions in the green space and women-led enterprises to access credit on favourable terms, mitigating the challenges they experience in scaling up their businesses and increasing their contribution to wealth creation and job opportunities.
Speaking during the signing ceremony, SBM Bank Kenya Limited CEO, Moezz Mir said, “Considering the financial hurdles experienced by most SMEs due to their risk profile and lack of security, SBM is always exploring innovative ways to mitigate possible risks in this sector and help SMEs overcome this challenge.’’
Mr Mir revealed that the Bank’s move to engage in such strategic alliances is aimed at realizing its strategic objectives which are centred around transforming the SMEs sector, supporting women-led businesses, and offering sustainable finance to businesses that focus on clean energy, cleaner production, green services, and climate-smart agriculture and natural resource management.
“This facility is unique in several ways as it represents an investment, productivity, and the acceleration of growth opportunities and realization of the UN sustainable development goals. As a progressive bank, we are deliberately playing a part in transforming the livelihoods of the Kenyan people by opening up markets for green businesses, accelerating wealth creation and improving the quality of life,” added Mr Mir.
African Guarantee Fund Group CEO, Jules Ngankam ascertained that the partnership with SBM Bank will empower SMEs to play their pivotal role in economic development, innovation, and job creation in Kenya.
“Our guarantee agreement with SBM Bank Kenya is structured to solve the holistic needs of SMEs by not only reducing their perceived risk, but also enabling the Bank, through our Capacity Development initiative to help small businesses ramp up their skills in areas such as leadership, human capital management, technology, financial management, and marketing. This will equip SMEs with appropriate financial management capabilities and boost their credit threshold requirements,” said Mr Ngankam.
“Additionally, this partnership will on the one hand empower women, entrepreneurs, through our AFAWA Guarantee for Growth product, and on the other hand foster sustainable growth by increasing financing of climate-focused SMEs through our Green Guarantee facility,” added Mr Ngankam.
In the last few years, SBM has taken a prudent approach to SME empowerment especially for the post-pandemic period, in which business owners are trained on business sustainability, fundraising, bookkeeping, and networking to assure profitable operations through individualized propositions and products.
The partnership agreement between the two institutions is expected to impact hundreds of SMEs across the country in the next 5years.