NIC Bank and African Trade Insurance Agency have renewed their strategic partnership aimed at providing collateral to their trade financing customers while cushioning the bank from risks associated with young businesses.
Making the announcement today, NIC Bank Retail Director Robert Kibaara said the one year old partnership had proved to be resourceful in servicing the banks customers as well as growing the SME segment for the business. Early last year, NIC Bank became the first bank to take up ATI’s new insurance cover that protected its entire portfolio of trade finance borrowers against the risks of insolvency and non-payment – risks that have traditionally inhibited most African banks from lending to SMEs.
The partnership renewal comes at a time many financial institutions are trying to get a chunk of the quickly growing SME segment in the country. The partnership with ATI enabled NIC Bank to extend credit facilities such as short term loans, invoice discounting, bank guarantees and letters of credit without the requirement of the standard tangible securities as is the current practice by banks.
Mr George Otieno, ATI Chief Executive Officer, said the growth in the SME segment in Kenya and beyond was a result of the concerted efforts that both government and the private sector had put in supporting the segment.
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