Sidian Bank receives half a billion funding to support SMEs

Sidian Bank secures Ksh.990 million loan for SMEs financing

African Guarantee Fund has issued a Loan Portfolio Guarantee to Sidian Bank worth Ksh.515,900,000 to boost financing of the Small and Medium Enterprises (SME) sector in Kenya.

The AGF Loan Portfolio Guarantee will enable Sidian Bank scale up their lending activities to SMEs through provision of credit facilities for a four-year period.

“One of the challenges that many SMEs face in accessing credit, is lack of adequate collateral to support their borrowing,” said AFG.

Sidian has been on the frontline in its support for SME’s across the country through a number of different instruments that seeks to provide accessibility to finance.

Speaking at the signing ceremony the CEO of Sidian Bank Mr. Chege Thumbi said “At Sidian Bank, we are excited to partner with AGF in this Loan Portfolio Guarantee Facility. AGF is a valuable partner; they are as passionate as we are about supporting SME growth and success in Kenya and Africa” This last year has been particularly difficult for SMEs, having to grapple with a lot of uncertainty. We expect that this guarantee facility and our other financial solutions will provide much needed support to business owners and enable them emerge stronger.”

African Guarantee Fund’s objective is to support Small and Medium sized Enterprises (SMEs), to play their role of engine drivers of growth. By closing the greatest obstacle, which is the financing gap, AGF enables SMEs to increase sustainable growth and to be a source of employment, skills and wealth creation. In turn, this serves to reduce poverty throughout the continent.

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African Guarantee Fund Group CEO Mr. Jules Ngankam said “SIDIAN bank provides efficient and convenient solutions to Kenyan entrepreneurs. Our loan portfolio guarantee will enable them to provide more financial solutions to their SME clientele especially in view of the impact of the pandemic on SME businesses. Most importantly, the guarantee facility will have an impact on thousands who are directly and indirectly dependent on the income generated from the SME beneficiaries.”

Sidian Bank is supporting entrepreneurs in the country through provision of transformational financial solutions, targeting mainly the SME sector.

Early this year, AGF received a capital increase of Ksh.2.1 billion (US$.20 million) from the Danish Investment Fund for Developing Countries (IFU) to facilitate green SME financing in Africa.

The capital increase was partially financed by the Danish Government, as part of the Danish “COVID-19 Development Assistance” package.

The capital increment into the African Guarantee Fund was meant to boost the Fund’s capacity to unlock financing for SMEs in Africa.

SMEs in the continent have experienced a deterioration in their credit-worthiness as a result of the economic impact of COVID-19.

The United Nations Economic Commission for Africa 2020 survey indicates business closure, lack of operational cashflow and a drop in demand as the top challenges facing African SMEs as a result of the pandemic.

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Lawrence Baraza is a prolific writer with competencies in Digital Media, Print, and Broadcast. Baraza is also a Communication Practitioner currently spearheading Digital content on Metropol TV's Digital Desk.

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