Swedfund chief executive officer Maria Håkansson said the funds will help Platcorp boost credit access to private individuals and SMEs in Kenya, Uganda and Tanzania—where the firm operates—to shield the small businesses against the economic effects of the Covid-19 pandemic.
Platcorp was founded in 2003 in Kenya and expanded to Uganda in 2004 and Tanzania 2008 respectively.
The firm says it has a loan portfolio across the three countries of $160 million (Sh17 billion). In 2019 Platcorp said it disbursed approximately 826,000 loans to its clients.
Kenya-based microfinance venture, Platcorp has secured a Sh600 million (5 million Euros) loan from the Swedish Development Finance Institution (Swedfund) for onward lending to small and medium sized enterprises (SMEs) in the region.
Swedfund chief executive officer Maria Håkansson said the funds will help Platcorp boost credit access to private individuals and small and medium-sized companies in Kenya, Uganda and Tanzania—where the firm operates—to shield the small businesses against the economic effects of the Covid-19 pandemic.
“In order to support small and medium-sized companies following the Covid-19 outbreak the Swedish Development Finance Institution, Swedfund, now increases the liquidity available to these companies by lending 5 million EUR to Platcorp,” she said.
“It is urgent for us as a Development Finance Institution to strengthen the financial resilience of companies and protect jobs in developing countries.”
Platcorp was founded in 2003 in Kenya and expanded to Uganda in 2004 and Tanzania 2008 respectively.
The firm says it has a loan portfolio across the three countries of $160 million (Sh17 billion). In 2019 Platcorp said it disbursed approximately 826,000 loans to its clients.
Private sector credit grew by nine percent in the 12 months to April 2020, compared with 8.9 percent in March and 7.7 percent in February, which is both below the ideal growth level of between 12 and 15 percent to support economic growth.
To spur access to credit the CBK cut its base lending rate in four successive meetings between September 2019 and April in a bid to spur lending to the private sector, having seen the economy’s growth slow down amid the impacts of the Covid 19 pandemic.
In its meeting last month, the MPC said real GDP growth in 2020 could slow to about 2.3 percent from 5.4 percent in 2019 due to the Covid pandemic, while inflation is expected to remain within the target range of five percent plus or minus 2.5 percentage points in the near term.
The CBK recently called for the speedy establishment of a credit guarantee scheme to shield lenders and small businesses against the economic effects of the Covid-19 pandemic.
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