The Kenya Development Corporation Limited (KDC) is seeking partner banks to advance Sh6.8 billion (€47.25 million) to micro, small, and medium enterprises(MSMEs).
Under the plan, the State-owned development finance institution KDC will advance between Sh10 million and Sh500 million to each financial institution for on-lending.
The corporation, however, did not reveal the interest rates charged on the facilities but has set loan tenures at between 60 and 120 months inclusive of a grace period of up to 12 months.
Financial institutions seeking to benefit from the funding will be required to provide the pricing criteria for the MSME loans and demonstrate co-funding ability.
Additionally, the partner banks will be required to provide collateral and receive approval from their respective boards to borrow from KDC.
KDC’s 'Safer' fund covers liquidity support to SMEs, de-risking lending through bolstering the national credit guarantee, and providing technical assistance and project management.
“Through Safer, we aim to address market failures in access to finance by MSMEs in Kenya. This project comes at a crucial time as businesses continue to grapple with ... multiple economic shocks,” KDC director-general Norah Ratemo said.
