Kenya’s Chase Bank has secured a KES5 billion (US$49 million) lending facility from the African Development Bank (AfDB) to spur its credit expansion to startups and other small businesses.
Chase Bank has been an active backer of Kenyan SMEs, launching SME Biz Hubs in Nairobi and Mombasa last year and partnering iHub to offer startups the opportunity to receive financial and advisory support in order to scale up their products.
It has now announced a KES5 billion on-lending facility from the AfDB which it said will further strengthen its intervention in the SME sector.
Chase Bank chief executive officer (CEO) Paul Njaga said the new facility would allow the bank to play a critical role in addressing income inequalities by on-lending to sectors that have historically been locked out of the credit market.
“SMEs are the engine of growth of Kenya’s economy in terms of employment creation and income generation,” he said.
“For the sector to grow sustainably, barriers to access financing will need to be addressed. We are therefore delighted by the partnership we have established with the AfDB to support clients in this business segment that have traditionally been under-served. This facility will also enable Chase Bank pursue one of its key mandates of achieving financial inclusivity.”
Gabriel Negatu, the AfDB regional director for East Africa, said by partnering with Chase Bank the AfDB was complementing its existing initiatives to support SMEs in Africa, as well as the development of the private sector and financial markets on the continent.
“As one of its priority objectives, the AfDB supports investments that contribute to inclusive growth on 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. This is a key priority area of the AfDB,” he said.
The new facility will be lent across various sectors of the Kenyan economy, including communications, business services, building and construction, retail, transport, manufacturing and hospitality.