Mid-tier lender Chase Bank has secured Sh5 billion ($50 million) from the African Development Bank (AfDB) for on-lending.
Chase Bank chief executive officer Paul Njaga said the facility, already approved by AfDB board, would enable the lender expand lending programmes to small and medium enterprises.
Chase Bank is targeting to lend Sh60 billion to the sector in the next three years. The focus will be on SMEs run by women and youth in sectors such as agribusiness and trade.
The bank made the announcement at the Global Entrepreneurship Summit held last year in Nairobi.
“SMEs are the engine of growth of Kenya’s economy in terms of employment creation and income generation. For the sector to grow sustainably, barriers to access financing will need to be addressed,” said Mr Njaga during the signing of the agreement Wednesday.
“We are therefore delighted by the partnership we have established with the AfDB to support clients in this business segment that have traditionally been underserved. This facility will also enable Chase Bank pursue one of its key mandates of achieving financial inclusivity.” AfDB regional director, Eastern Africa, Gabriel Negatu, said the multilateral lender is keen on partnering with financial institutions that seek to promote inclusive growth in Africa.
“By partnering with Chase Bank, the AfDB complements its existing initiatives to support SMEs in Africa as well as the development of private sector and financial markets in the continent.
“We are pleased to have this opportunity to work with Chase Bank which will help to contribute towards financial intermediation by promoting SMEs’ access to risk capital as well as enhancing the capacity of entrepreneurs in Kenya and Africa in general,” said Mr Negatu.
Mr Njaga meanwhile said the new facility would be lent across key sectors of the Kenyan economy including business services, building and construction, retail, transport, communications, manufacturing and the hospitality industry.
Wednesday, Mr Njaga said the lender had already disbursed loans nearly half the target at close to Sh30 billion.
In December, Chase Bank secured a Sh3 billion loan from the Global Climate Partnership Fund for environmental friendly energy projects.