The Kenya Commercial Bank (KCB) and the African Development Bank (AfDB) have signed a $100 million line of credit (LOC) agreement today. The funds will be used to lend to corporate businesses and SMEs.
The line of credit will offer liquidity support to businesses in the agriculture and energy sectors. Additionally, the LOC will support the youth by promoting job creation and enabling financial access to businesses.
Corporate businesses and SMEs are economic growth drivers and they also create jobs, promote output diversification, creating indigenous entrepreneurship, and developing regional and global ties. Therefore, providing affordable funds to such businesses is important in helping them thrive and continue to propel economic growth.
Mr Negatu, Director General of AfDB’s East Africa Regional Development and Business Delivery Office said:
“The AfDB is cognizant of this important element and hence seeks to play a part by collaborating with partners with a view to leveraging respective comparative advantage. The subject LOC will, therefore, bolster KCB’s ability to reach and serve deserving corporate businesses and SMEs businesses in Kenya. It will also enable AfDB to contribute towards KCB’s efforts of broadening access to financing by businesses in Kenya hence performing an important role [in] private sector development.”
Joshua Oigara, the KCB Group CEO and MD said the partnership between the two institutions is a reflection of their continued commitment to funding projects in food security, renewable energy, agriculture, and SMEs.
“This collaboration will enable KCB to continue serving its clients in various business segments as business segments as well as play a crucial role in contributing towards the creation of employment among the youth,” Mr Oigara added.
“The funding will go a long way in supporting the bank’s interventions geared towards achieving the economic transformation of Kenya in line with the Government’s Big Four Agenda.”
The partnership with KCB is also aligned with AfDB’s ten-year strategy (2013-2022) and the bank’s High-5 Strategic priorities of enhancing the living conditions of Africans.
In March, AfDB issues a three-year bond to raise Sh200 billion to lend to its members including Kenya. In November 2017, the bank issued a five-year bond of $2 billion.
The LOC will also strengthen KCB’s role as a financial services enabler in Kenya’s economy. The bank has been propelling the economic agenda in East Africa and is confident of the region’s potential in entrepreneurship, innovation, financial inclusion, and promoting regional legacy projects to push for national development and economic growth.