Barclays Bank relaxes credit rules for SMEs seeking below Sh15m
Barclays Bank CEO Jeremy Awori (left) and board chairman Francis Okomo-Okello with Graca Machel during an NSE meeting on March 4, 2015. PHOTO | SALATON NJAU
What you need to know:
Barclays Bank will no longer require its SME customers to provide audited financial statements for asset-based credit requests of up to Sh15 million, but will instead rely on non-financial behavioural scorecards to assess their loan requests.
The bank will be providing financing for purchase of motor vehicles, construction equipment, industrial plant and machinery, office and agricultural equipment.
Barclays Bank has moved to establish a foothold in the SME financing business by easing asset funding requirements for customers seeking below Sh15 million.
The bank announced that it will no longer require its SME customers to provide audited financial statements for asset-based credit requests of up to Sh15 million, but will instead rely on non-financial behavioural scorecards to assess their loan requests.
“Asset finance in Kenya has seen significant growth in the last five years and this market is currently valued at Sh100 billion. We believe that we are going to significantly drive asset growth in such areas as transport and manufacturing industries,” said Barclays Kenya managing director Jeremy Awori.
The lender will be providing financing for purchase of motor vehicles, construction equipment, industrial plant and machinery, office and agricultural equipment.
The SME sector contributes more than 60 per cent of the country’s GDP and more than 80 per cent of all new jobs, and has been a rich source of revenue for banks which lend to the sector.
Barclays has been seeking to grow its revenue after falling behind other big banks in recent years, which came after years of being the market leader in profit.
It recently launched a mortgage unit and is looking to strengthen its investment banking unit to tap into the advisory business.
Barclays announced a promotional mortgage rate of 11.9 per cent last month underlining its aggressiveness to grow its loan book which has been stagnant in recent years.
The bank became the first top lender to cut its variable loan rate in reaction to the January revision of the Kenya Banks Reference Rate (KBRR) from 9.13 per cent to 8.54 per cent.
