Family Bank has secured a Sh1.5 billion loan portfolio guarantee facility from the African Guarantee Fund (AGF) for micro, small and medium-sized enterprises (MSMEs).
This is aimed at increasing its loan book to micro, small and medium-sized enterprises, women-led businesses and climate-friendly investments.
The AGF will in addition to the extension of the credit guarantee facility, provide capacity-development assistance to Family Bank that will be utilised for technical expertise to the MSMEs and expose entrepreneurs to global knowledge on business development and climate-smart ventures through the five-year agreement.
"Through this credit facility, Family Bank can scale up lending to MSMEs who form over 80 per cent of our customer base,” said Family Bank Chief Executive Ms Rebecca Mbithi.
"With the gradual recovery of the economy as we contain the effects of the pandemic, we can widen our capital base to support more MSMEs by extending credit at favourable terms."
The guarantee agreement will cover funded facilities such as overdrafts, term loans and non-funded facilities such as letters of credit, and bank guarantees, among other credit facilities.
“Our loan portfolio guarantee agreement with Family Bank is structured to reduce the perceived risk of SMEs and to solve their holistic needs through Capacity Development assistance. Additionally, this renewed partnership will also focus on empowering women-owned and climate-focused SMEs,” said AGF Group Chief Executive Officer Mr Jules Ngankam.
Previously, Family Bank had two loan portfolio agreements with AGF worth Sh250 million in 2015 and Sh774 million in 2018.