KCB gets Sh10b from AfDB to lend to SMEs, youth

Front view of Kenya commercial Bank(KCB) isiolo branch.

KCB Group will access up to Sh10 billion from the African Development Bank for lending to small businesses and youth.

This is after the Board of Directors of AfDB yesterday approved $100 million (Sh10 billion) line of credit (LOC) to the Kenyan lender.

The funds will help KCB grow its loan book, which, just as many other local banks, has been curtailed by the law capping interest rates.

Liquidity support

It was not immediately clear whether the section of borrowers targeted by this credit will get loans at a slightly lower rate than 14 per cent that commercial banks are currently charging customers.

The loan will also be extended to corporates. “Proceeds of the LOC will provide much-needed liquidity support to, among other sectors, infrastructure, energy and value-addition through manufacturing and important population segments like the youth,” said AFDB in a statement.

The Abidjan-based multilateral development bank noted the credit will contribute towards enhancing job creation as well as facilitating financial access to businesses.

“The funding is aimed at supporting KCB’s lending operations 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 AFDB in a statement.

Data from Central Bank of Kenya shows that for the first time since August 2015 when growth of credit embarked on a downward trend, only last August did it record a growth. This was just a slight jump of 1.6 per cent.