KCB in Sh1 billion SME guarantee plan with Sweden

Regional lender KCB and Swedish International Development Cooperation Agency (SIDA) have rolled out a Kes1 billion guarantee scheme to de-risk SMEs in their efforts to access credit and support their growth ambitions.

The seven-year guarantee scheme will enable the bank to strengthen its commitment to financing SMEs, which continue to experience challenges, especially with access to affordable credit. KCB Bank Acting Director of Retail Banking Michael Kung’u noted that the instrument will provide much-needed momentum for SMEs to tap into the bank’s expanded portfolio of financing.

“We are excited about this new instrument as it offers us the flexibility to work with SMEs and the refugee population in their ambitions to support their entrepreneurial journey. The SME guarantee will therefore go a long way in diversifying the SMEs’ financing resources and reducing collateral requirements, thereby enabling them to play a leading role in achieving economic and social development,” Mr Kung’u said.

Mitigating risks

Risk-sharing facilities are a key tool to support knowledge gaps by lenders, broadening their SME lending while mitigating risk and allowing them to build capabilities and track records in serving niche market segments like SMEs and refugees.

“Sweden’s Development Cooperation through the Swedish International Development Cooperation Agency (Sida) aims to create opportunities for better living conditions for people living in poverty and under oppression. This initiative will enable Sweden’s engagement to go beyond the Official Development Assistance (ODA) and focus more on innovative financing approaches to mobilize domestic resources and external private capital to reach the most vulnerable communities in Kenya,” Caroline Vicini, Swedish Ambassador to Kenya said.

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