SMEs get Sh9.3b boost

Commercial Bank of Africa (CBA) (Photo: Courtesy)

Commercial Bank of Africa has secured a $90 million (Sh9.3 billion) to support its lending to small and medium enterprises.

The funding package from African Development Bank (AfDB) will also be used to support local firms involved in value-addition. According to Commercial Bank of Africa (CBA), areas of focus will include trading, manufacturing, agriculture, infrastructure, transport, and construction.

Speaking at the signing ceremony in Nairobi, the AfDB director-general for the East Africa Regional Hub, Gabriel Negatu, said the funds would enhance job creation and facilitate financial access to businesses. AfDB has a 10-year strategy to help increase enterprise development and competitiveness through expansion of the economic base.

Credit crunch

CBA Chief Executive Isaac Awuondo said the funds would help broaden customer access to the bank’s services and reduce financing constraints faced by SMEs and corporates as well as reduce the trade financing gap.

“The intervention will also promote private sector development as well as support broad-based economic growth in line with Kenya’s industrialisation strategy,“ he said.

There is a credit crunch in the country, with a Central Bank survey undertaken between April and June this year showing that 45 per cent of the commercial banks polled said the interest rate cap had little effect on the loans issued.