Tuesday, September 17, 2019
Home > Banking > KCB Gets Shs365bn AfDB Loan For Lending To SMEs
BankingFeaturedNews

KCB Gets Shs365bn AfDB Loan For Lending To SMEs

KCB Group, Kenya’s largest bank by assets, has secured a $100 million (about Shs364.9 billion) loan from the African Development Bank (AfDB) for onward lending to Small and Medium Sized Enterprises (SMEs) in the region.

The AfDB board approved the long term funding on Wednesday.

“The funding is aimed at supporting KCB’s lending in Kenya especially to corporate businesses, small and medium enterprises (SMEs) as well as projects that are critical to the development of Kenya’s economy,” said the multilateral lender in a statement.

“Proceeds of the line of credit will provide much-needed liquidity support to, among other sectors, infrastructure, energy and value-addition through manufacturing and important population segments like the youth.”

AfDB urged KCB to use the facility to also boost support for women owned businesses in its regional operations.

KCB’s loan book grew 11.4 per cent to Sh385.7 billion in the year ended December 2016 compared from Sh345.9 billion in the review period a year earlier.

Early this month, AfDB signed a $90 million (about Sh9.29 billion) facility with Commercial Bank of Africa, the country’s largest privately-owned lender with CBA eyeing to finance firms in trade, manufacturing, agriculture, infrastructure, transport, and construction.

Kenya has been on a credit squeeze since September last year, with banks rationing loans following the interest rate cap.

The 12-month growth of credit to the private sector recorded a slight increase to 1.6 per cent in August from 1.4 per cent in July, reversing the downward trend since August 2015.

According to Central Bank of Kenya (CBK) data, private sector credit growth fell progressively in the eight months since September last year standing at 4.7 per cent in September, 4.7 per cent (October), 4.6 per cent (November), 4.3 per cent (December), 4.2 per cent (January), 3.8 per cent (February) 3.3 per cent (March) and 2.4 per cent in April.

CBK estimates that 60 per cent of the credit to the private sector goes to real estate, manufacturing, trade and personal loans.\

-Daily Nation

 

  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  

Leave a Reply

Your email address will not be published. Required fields are marked *