For thousands of SME owners in Kenya, disasters such as fire, floods, or even theft during riots can easily see the investor's once-thriving business teeter on the brink of collapse.

Once disaster strikes, the loss leaves SME owners facing a monumental financial setback, given that the costs of restocking and repair works on their shops can be overwhelming.

Without insurance, the financial hit on SME owners puts at risk not only the stability of their families but also the livelihoods of their workers.

These incidences are all too familiar across Kenya, with ever-present risks of political riots, fire, burglary, and floods looming large, threatening to crash the dreams of many SME owners who run without insurance.

Linda Biz, a new insurance product launched by an alliance between Absa Bank Kenya and Old Mutual Kenya, seeks to change this narrative as these financial services institutions collaborate to enhance their support to Kenya's SME ecosystem.

Cover SME employees against injury

Linda Biz is tailored to provide coverage for SMEs against losses due to business interruption, loss of money and theft by servants, earthquakes, fire, floods, and riots. It also covers employees of the business against injury, disablement or death (WIBA). This initiative is poised to bolster SME owners, equipping them with critical financial tools to scale, sustain, and protect their investments.

Absa Bank Kenya CEO Abdi Mohamed noted that Linda Biz is set to help SMEs bolster their capacity to grow in an unpredictable business environment.

"In Absa, our relationship with the customers, especially in the SME sector, has evolved. Today's relationship is a partnership aimed at empowering the customer, building a relationship that is based on ensuring that we work with SMEs through various cycles such as growth, dealing with uncertainty, as well as partnering with other organizations to better support SMEs," Mr Mohamed explained.

The Absa Bank Kenya-Old Mutual Kenya alliance is meant to bring the best industry experiences by some of Kenya's iconic financial services companies as they roll out Linda Biz insurance services, Mr Mohamed added.

Old Mutual Kenya CEO, Arthur Oginga, noted that the new insurance offering marks a significant step by the two companies as they firm up their support for SME customers.

"Our mission is to grow, sustain, and protect the prosperity of our customers. This partnership with Absa strengthens our integrated financial services offering to our customers," noted Mr Oginga.

“Among many other benefits, this seeks to address issues affecting SMEs including asset protection, employee health, and business continuity," he added.

Mr Oginga cited a recent study undertaken by the insurance giant on the savings habits of Kenyans that identified access to finance, retirement planning as well as managing financial stress as some of the outstanding aspects where SME owners need support.

At the same time, Absa Bank Kenya Director of Business Banking Elizabeth Wasunna shared insights into the efforts undertaken to better learn and address the pain points facing SMEs, which has helped tailor the Linda Biz product.

Old Mutual Kenya CEO Arthur Oginga says that Linda Biz insurance offering marks a significant step by the two companies as they firm up their support for SME customers in the country.

Read also: Absa Bank’s growth strategy yields 34% net profit rise

 

Absa Bank Kenya-Old Mutual partnership

 

"We have been very deliberate in listening and engaging with entrepreneurs across Kenya to understand how we can support their journey," she said.

 

"Using this feedback, we have been revamping our SME offering over the years. We have been very intentional in tailoring solutions under our four critical pillars: focus on enabling SMEs access to markets, sustainable finance, critical information, mentorship, and coaching."

 

By addressing the critical insurance needs of small businesses, the Absa Kenya-Old Mutual partnership looks set to contribute to the broader economic stability and prosperity of Kenya where SMEs account for about 80 percent of the workforce.

 

According to a 2016 survey by the Kenya National Bureau of Statistics, about 7.4 million SMEs form the backbone of Kenya's economy and contribute about 40 percent of the country's Gross Domestic Product.

 

With Kenya's population projected to hit 57.8 million by 2030, Absa Bank Kenya and Old Mutual have a chance of helping SME businesses to scale, and protect their wealth and investments while also unlocking new avenues for growth.

 

"We believe that this partnership with Old Mutual will not only enhance the financial stability of SMEs but also support their growth projections. Further, we believe this partnership will equip our SME clients with tools necessary to expand their businesses," Ms Wasunna explained.

 

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