A total of Ksh3.36 billion in financial agreements has been secured by two lenders, Victoria Commercial Bank (VCB) and Sidian Bank separately to assist the expansion of small and medium enterprises (SMEs) in Kenya.
To boost its portfolio of small and medium enterprises (SMEs), VCB has obtained a Ksh2.4 billion loan from the Arab Bank for Economic Development in Africa (BADEA) in one of the deals. Nimai Financial Sector Advisory of Dubai mediated the agreement.
“I am extremely delighted about the partnership between VCB and BADEA, culminating in a credit extension of $20 million” VCB chief executive officer, Yogesh Pattni said.
Separately, Sidian Bank has agreed to a protection against defaults on $8 million(Ksh965 million) worth of SME loans to the health industry with two US agencies.
The United States Agency for International Development (USAID) and the United States International Development Finance Corporation (DFC) is providing the portfolio guarantee. It is a part of the lender’s commitment to close the financial gap that the Kenyan healthcare industry is now experiencing.
Sidian Bank CEO, Chege Thumbi said that as collateral for loans from Sidian Bank, the facility covers any shortage faced by clinics, hospitals, pharmacies, manufacturers of personal protective equipment, and diagnostic laboratories.
“Through the provision of guarantees by the bank, our customers who have a shortfall on the security required for credit facilities can access much-needed credit.’’ He said.
“I encourage all healthcare practitioners and service providers in the value chain to leverage from this opportunity, therefore through the provision of guarantees by the bank, our customers who have a shortfall on the security required for credit facilities can access much-needed credit, scaling up their businesses.”
Increased access to commercial bank financing is essential for the development of Kenya’s healthcare industry, which has long suffered from chronic underfunding.
According to USAID, it has assisted in making this assurance possible to solve issues that are now impeding the expansion of the private healthcare sector, particularly for underprivileged private providers.
“Working with the private sector is important to achieve sustainable health interventions and this partnership will provide additional financial resources to small- and medium-sized private healthcare enterprises,” said USAID Health Population and Nutrition Office Director John Kuehnle.
The facility will also assist Sidian in expanding its SME and trade finance lending portfolio, which it intends to use as a competitive advantage in the banking industry, which is dominated by big-notch lenders.
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