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The Nairobian

Family Bank secures Sh1 billion from Oiko credit to bolster SME lending

News

By Standard Reporter | Dec 04, 2015

Nairobi, Kenya: Family Bank has secured Sh1 billion from Oikocredit East Africa – a subsidiary of Oikocredit International headquartered in Netherlands– for on-lending to small and medium-sized businesses in Kenya.

The deal – the largest ever in Africa for Oikocredit – a development financier focused on uplifting small businesses and the poor in society - will expand the SME loan portfolio of the Bank currently the main booster of its performance. For the nine months to September 2015 – the bank’s focus on small and medium enterprise lending and personal loans saw a significant jump in its loan book – growing by 39percent from Sh37.9billion to Sh52.8Billion.

Family Bank Managing Director Peter Munyiri said the partnership with Oikocredit resonated with the lender’s mantra of transforming lives and businesses – helping them to access alternative and lower cost sources of finance.

“We know how important it is to support business growth. We share a common vision of positively impacting lives and businesses. There’s increased demand of financial services by SMEs and we can only address this if we are innovative and have the capacity to address their growth needs,” said Mr. Munyiri.

“This is our biggest deal in Africa. This partnership with Family Bank is borne out of a shared vision. Positively impacting lives – being able to extend a helping hand to small and medium-sized businesses that might otherwise struggle to achieve their financing goals,” said Oikocredit Country Manager - Ms Caroline Mulwa.

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The funding will be available for businesses across a wide variety of industry sectors under the SME category. The loans will be used for a wide variety of purposes but cannot be used as working capital or to refinance existing debt.

The bank has deployed a multi-pronged capital raising strategy – with a mix of both debt through the Ksh10Billion Bond - whose first tranche is currently trading at the NSE - and equity financing with increased global lenders’ interest.

Part of these funds are earmarked for lending activities as well as fuelling the aggressive expansion that has seen it opening its 88th branch in Maua with three more branches to open in Wote, Kahawa West and Mlolongo next week.