Faulu lands Sh1 billion to fund small firms
By Standard Reporter | September 26th 2015
Faulu Microfinance Bank has received Sh1 billion from European Investment Bank (EIB) to finance small businesses.
EIB's new lending deal is the first partnership with Faulu Microfinance Bank under a new EUR 50 million (Sh5.85 billion) initiative to support microfinance institutions across East Africa. In the last eight years, EIB has provided EUR 160 million (Sh18.72 billion) for lending to banks and microfinance institutions in Kenya.
"The European Investment Bank is committed to backing public and private sector investment that boosts economic growth and improves lives across Africa," said Pim Van Ballekom, European Investment Bank Vice President.
Faulu Microfinance Bank Managing Director Charles Njuguna said this is the second facility with the EIB and this new credit line will help fund SMEs.
"It will further bolster our mission of financial inclusion and transformation in the communities we serve in Kenya at large," Njuguna said. The new credit will allow Faulu Microfinance Bank to provide loans in Kenyan shillings with longer tenure to customers.
Lending by Faulu Microfinance Bank to support investment by companies and entrepreneurs across Kenya in recent years has been strengthened by a EUR 4 million (Sh468 million) loan from the EIB agreed in December 2011.
Faulu Microfinance Bank is one of 10 financial institutions and banks in Kenya to currently benefit from a EUR 5 million technical assistance programme, currently managed by the European Investment Bank, and active across East Africa.
This will help local banks to improve lending by sharing best-practice in key areas of bank management to ensure that banks continue to improve their operations and train their staff to the highest standards in the increasingly competitive banking industry.
Part of the dedicated technical assistance programme also helps bank clients and local companies to improve entrepreneurial skills, draft business plans and to submit quality credit requests among others. EIB has provided nearly Sh120 billion to support public sector projects and private sector investment in Kenya since the first operation in 1976.
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