Sidian Bank has secured Ksh.990 million loan from Netherlands based social impact investor, Oikocredit to finance Small and Medium Enterprises (SMEs) in Kenya.
The funding will support the bank’s growth plans to further its strategy of providing affordable credit to its SME clients and privately-owned business enterprises.
“I am delighted with the direction that the bank is taking. This is yet another footprint of the bank’s strategic initiative to be the preferred bank for trade finance solutions and SMEs, especially in view of the impact of the pandemic on SME businesses. We intend that the success of this partnership will impact SMEs ranging from small, medium and large,” said Sidian Bank CEO Chege Thumbi.
Sidian Bank has been at the forefront of providing financial solutions to the SME sector in the economy through shaping, developing and addressing the needs of entrepreneurs.
This is the second time in a year that Sidian Bank has secured a loan to fund SMEs.
In July this year, African Guarantee Fund (AGF) issued a Loan Portfolio Guarantee to Sidian Bank worth Ksh.515,900,000 to boost financing to SMEs, bringing in total over Ksh.1 billion financing the lender has secured for small businesses in the country.
According to Oikocredit, about 600 million jobs will be needed by the year 2030 to absorb the growing global workforce.
This makes SME development is a high priority for many governments globally with most jobs created by SMEs being seven out of ten in the emerging markets.
However, access to finance has been is a key constraint to SME growth, being the second most cited obstacle facing the sector growth in emerging markets and developing countries.
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“Oikocredit is excited to be part of Sidian Bank’s Growth. This institution has demonstrated the ability to package trade solutions to the emerging SME clientele. This investment will enable the bank to lend more and thus contribute to the creation of sustainable jobs, which is in line with the mission of Oikocredit to create a lasting social impact on the low-income sections of society. During the investment period, Oikocredit will work with the bank to mainstream social impact and its measurement into its lending activities,” said Oikocredit’s Investments Manager, East and Southern Africa, Caroline Mulwa.
Oikocredit, a social impact investor and worldwide cooperative, has over four decades of experience in promoting sustainable development through investments and focuses on investments around financial inclusion, agriculture and renewable energy.
So far, Oikocredit has financed 529 partners, with total outstanding capital of Ksh.108.32 billion (€ 835.5 million) as of June 30, 2021.
Oikocredit’s loans, equity investments and capacity building aim to enable people on low incomes in Africa, Asia and Latin America to improve their living standards sustainably.