NBK to Cover Loan Defaults by SMEs in New Partnership Deal

National Bank of Kenya (NBK) has partnered with African Guarantee Fund (AGF) to offer guarantee to loan defaults by Small and Medium-sized Enterprises (SMEs).

NBK will cover defaults arising from both private and public sector SMEs in women-led businesses, Water, Sanitation and Hygiene (WASH) sector and green financing in Kenya.

The partial guarantee will cover up to 50% of collateral needs for a qualifying facility with 75% cover for women and green SMEs.

“This strategic partnership will enable our MSME customers in the targeted sector to overcome the financing barrier in their day-to-day financial management needs and therefore, unlock opportunities to spur growth,” Peter Kioko, the Acting Managing Director at NBK said.

He added;

“As NBK, we have a solid track record of supporting SMEs in Kenya and therefore with this partnership we will increase the number of SMEs we finance and also pay special focus to the women entrepreneurs, among others to facilitate their growth and in turn the growth of our economy.”

It is important to note that qualifying borrowers must be drawn from the Micro, Small and Medium-sized Enterprises (MSME).

These MSMEs must also be registered or licensed SMEs domiciled in Kenya and must represent new or incremental business in the WASH sector.

AGF Group CEO, Jules Ngankam said AGF will share risks envisioned by the bank in situations where SMEs are unable to meet collateral threshold requirements.

“By expanding access to finance for SMEs in the WASH sector, our guarantee will improve the lives and health of Kenyans through increased access to safe hygienic and sanitation facilities,

“We will also particularly support green SME projects and Women-led/owned businesses that are at the helm of water and sanitation,” Ngankam said.