Credit Bank has been on the forefront in its campaign towards the enabling the growth of SMEs in Kenya.
Through Entrepreneurship Hub that was formed in 2016 with the objective of providing a platform where entrepreneurs can engage, learn and find mentors who help them prosper, lack of resources was identified as the major challenge and specifically access to capital was limited.
Head of Business and Marketing Pamela Mutembei said : “Lack of systems and processes was a fundamental challenge that simply entrepreneurs lack the resources and/or skills to set up systems that will ensure smooth operations of their enterprises.”
Credit bank was recently funded by the African Development Bank (AfDB) for onward lending to small and medium-sized enterprises (SMEs). The financier says the loans will be accessed by companies in the construction, agriculture, renewable energy and manufacturing sectors.
The board of directors of AfDB approved a USD 8 million (about Sh824 million) targeted financing to Kenya’s Credit Bank for lending exclusively to small and medium enterprises in construction, agriculture, renewable energy and manufacturing.
This would be attributed in the bank’s support in growing the small enterprises making the funding the first such financing programme for SMEs in the continent by AfDB.
The loan, which has a five-year maturity with a two-year grace period, marks the first proposal under the Bank’s new initiative to prop-up SMEs in Africa. Credit Bank is privately-owned and dedicated to propelling SMEs’ growth through financing and capacity building initiatives.
“It is financially sound and, as an adequately capitalized tier-3 financial institution, has a strong track record of SMEs, providing working capital and trade finance facilities. As such it is well-positioned to succeed in providing innovative longer term financial solutions to SMEs along several value chains including strategical financial solutions in Kenya,” Stefan Nalletanby, Bank Group director for financial sector development, told the Board.
Nalletanby said that Credit Bank has the supporting infrastructure and a strong presence in key economic regions within Kenya and is expected to support several small businesses in rural areas, thereby producing substantial development impact.
The over-arching objective of the project is to provide access to finance to SMEs, the “missing middle” in Kenya, thereby reducing their financing gap. The facility’s proceeds will support transactions aimed at improving their productive capacities thereby enhancing entrepreneurship, job creation, income generation, and sustainable growth, leading to a multiplier effect on the country’s economic growth,” according to the Bank.
Entrepreneurship hub has looked at seeking in place systems and processes give businesses benefits such as being investor ready.
Further, it helps the business set itself on a controlled growth trajectory.
“Another challenge we identified is people. Human resources are a vital part of running a business. This includes sourcing for talent, having the right management in place and the right leadership skills to steer the business forward through eHub Masterclass,” she continued
Such challenges necessitated action from Credit Bank. What we needed is to establish a platform that would benefit the entrepreneur in all challenges they face. This was the beginning of the Entrepreneurs’ Hub (eHub).” Mutembei concluded.
