National Bank of Kenya (NBK) has partnered with Aqua for All to launch a Water, Sanitation and Hygiene (WASH) financing program targeting Micro, small and Medium Enterprises (MSME), corporates, vendors and other product and service providers along the water and sanitation value chain.
The Ksh.5 billion program will allow private capital and investments to flow into the water and sanitation sector. The program, which is currently in its pilot phase, targets at least 1000 MSMEs in the pilot that will run within the first 12-18months.
“This partnership comes at an opportune time as Kenyans and especially the SME sector continues to face very difficult times with the ongoing pandemic. With the new product, we seek to scale up the SMEs in the water, Sanitation and Hygiene economy for sustainable water services”
Two different facilities will be offered under the loan-financing program including Working Capital Loans dubbed “Jenga Biashara Loan” a short-term loan product for micro and small enterprises, with a tenure of up to 5 years and a maximum facility of Ksh.5.1 million (EUR 40,000).
The facility targets informal/semi-formal entrepreneurs providing WASH products/services largely in peri-urban and rural areas including water vendors, drillers, distributors/installers of water equipment, solar systems, construction of toilets.”
The second facility is the Infrastructure Project Loans, a term loan product with a tenure of up to five years and a maximum facility of Ksh.52.1 million (EUR 400,000).
This facility targets household connections, smart metering, solar projects and other efficiency improvement assets. The target group for this product constitutes small and medium public/private/community Water Service Providers and select corporate-size WASH entities.
On her part, Aqua For All Managing Director Josien Sluijs, lauded the partnership which comes at a time when drought has been declared a national disaster by President Uhuru Kenyatta.
“Giving enterprises, utilities and households private funding in the water sector is something that can be realized through this partnership. At these times, it is extremely important because few people have access to clean water and sanitation” she said.
The partnership comes at a time when the water sector is heavily reliant on external funding. According to the Ministry of Water and Sanitation, the current sector funding is estimated at less than 40 percent of the sector requirements with concessionary and grant funding from development partners estimated at almost 90 percent.