AFRICAN GUARANTEE FUND ISSUES KES 1.5 BILLION GUARANTEE FACILITY TO FAMILY BANK TO FUEL GROWTH OF SMEs IN KENYA
African Guarantee Fund has issued a KES 1.5 billion loan portfolio guarantee facility to Family Bank, to increase its loan book to micro, small and medium-sized enterprises, women-led businesses and climate-friendly investments.
In addition to the extension of the credit guarantee facility, the African Guarantee Fund will provide a capacity-development assistance to Family Bank that will be utilized for technical expertise to the MSMEs and expose entrepreneurs to global knowledge on business development and climate-smart ventures through the five-year agreement.
AGF Group Chief Executive Officer, Jules Ngankam said, “SMEs are very crucial to the achievement of meaningful sustainable development. Their greatest barrier, however, is access to finance. Our loan portfolio guarantee agreement with Family Bank is structured to reduce the perceived risk of SMEs and to solve their holistic needs through Capacity Development assistance. Additionally, this renewed partnership will also focus on empowering women-owned and climate-focused SMEs.”
Family Bank Chief Executive Officer Rebecca Mbithi said, “Through this credit facility, Family Bank can scale up lending to MSMEs who form over 80% of our customers base. With the gradual recovery of the economy as we contain the effects of the pandemic, we are able to widen our capital base to support more MSMEs by extending credit at favourable terms.”
This guarantee agreement will cover funded facilities such as overdrafts, term loans and non-funded facilities such as letters of credit, bank guarantees, among other credit facilities.
Previously, Family Bank has had two loan portfolio agreements with AGF worth KES 250 million in 2015 and KES 774 million in 2018.