Faulu to lend small firms Sh1 billion in three counties


Nakuru County Governor Lee Kinyanjui (centre) signs the visitors book on July 18, 2021, during an event to officially open Faulu Bank’s new branch in Nakuru town. Looking on is the Bank’s CEO Apollo Njoroge (left) and George Maina, the Bank’s Board Chairman. PHOTO | NMG

Faulu Microfinance will lend more than Sh1 billion to small enterprises in Nakuru, Nyandarua and Laikipia counties, in a move set to help the bank grow its presence and revenues.

The funds are part of a Sh3 billion package targeting SMEs over the next three years.

The microfinance said it will be targeting farmers, traders, contractors, manufacturers and property developers in the three counties.

The micro lender in May received Sh1.45 billion capital injection from its parent company, Old Mutual Africa Holdings to strengthen its balance sheet and expand to the grassroots after posting a loss last year.

“Faulu is keen on strengthening its play in the counties, where the economic action is taking place, by providing much needed financial support to improve the capacity of small enterprises to take advantage of unfolding trade opportunities at the devolved level,” said Faulu Bank CEO Apollo Njoroge.

Faulu is the largest micro finance bank in the country controlling a market share of 40.2 percent as at end of December, according to data by the Central Bank of Kenya.

The loan is set help the microfinance recover from a Sh399 million net loss posted in the year ended December 31.

The loss was attributed to decline in credit uptake, increased finance costs and non-performing loans at time when MFBs were facing stiff competition from digital loan lenders.

The increasing losses saw the MFB merge branches and marketing office to cut operational costs and leverage on mobile banking channels.

Faulu said it will be offering trade and asset financing to grow businesses in the counties, support value addition in agro-processing, manufacturing, horticulture, dairy and housing.

The trade finance products include local purchase order and local service order financing, invoice discounting and supply chain financing.