The African Development Bank (AfDB) and KCB Bank Kenya Thursday signed a Ksh 10 billion ($100 million) Line of Credit (LOC) Agreement, to be used for lending to corporate businesses, Small and Medium Enterprises (SMEs).
This LOC will provide much-needed liquidity support to businesses in various sectors, infrastructure, energy and manufacturing particularly value-addition.
The LOC will further support population segments like the youth, effectively serving a dual purpose of enhancing job creation as well as facilitating financial access to businesses.
The funding is expected to bolster growth of the Kenyan economy which is known for vibrancy, driven by its diverse and resilient characteristics. The economy enjoys a unique feature where both the corporate segment and the established SMEs drive economic growth and are also critical in generation of employment, enhancing output diversification, developing indigenous entrepreneurship and forging trade ties not just in the region but globally.
Availability of requisitely priced funds at matching tenors is therefore a key ingredient towards assisting these enterprises to thrive sustainability and eventually contribute towards economic development.
“The AfDB is cognizant of this important element and hence seeks to play a part by collaborating with partners with a view to leveraging respective comparative advantage”, said Negatu, the Director General of AfDB’s East Africa Regional Development and Business Delivery Office.
“The subject LOC will therefore bolster KCB’s ability to reach and serve deserving corporate businesses and SMEs businesses in Kenya. It will also enable AfDB to contribute towards KCB’s efforts of broadening access to financing by businesses in Kenya hence performing an important role of private sector development,” added Negatu.
This strategic partnership between the two institutions reflects their continued commitment to finance projects in agriculture and food security, renewable energy, SMEs as well as youth segment, said the KCB Group CEO and MD Joshua Oigara.
“This collaboration will enable KCB to continue serving its clients in various business segments as well as play a crucial role in contributing towards creation of employment among the youth,” Oigara said.
“The funding will “go a long way in supporting the bank’s interventions geared towards achieving the economic transformation of Kenya in line with the Government’s Big Four Agenda.”
This intervention is aligned with AfDB’s Ten Year Strategy, 2013-2022, as well as one of the Bank’s High-5 Strategic priorities of improving the living conditions of Africans. It will help to increase enterprise development and competitiveness through expansion of the economic base.
This will be made possible by enhancing access to financial services and expanding access to social and economic infrastructure which will thus contribute to inclusive growth.
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The funding line is expected to further strengthen KCB’s catalytic role in Kenya’s economy as a financial services enabler. KCB has a long history of driving East Africa economic agenda and is optimistic about the region’s future potential in the area of entrepreneurship, financial inclusion, innovation and supporting regional legacy projects to drive national development and economic prosperity.
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