NIC Bank has signed a Loan Portfolio Guarantee agreement amounting to
USD 5 Million with the African Guarantee Fund. The partnership aims to
unlock financing intended to facilitate the promotion, growth and
development of Small and Medium sized Enterprises (SMEs). The signing
ceremony took place at the NIC Bank headquarter offices in Nairobi.
SMEs in Kenya, like in other African countries face major challenges
when seeking financing in order to expand and grow their businesses.
Recent studies have shown that SMEs in Kenya employ approximately 14.9
million Kenyans and contribute an estimated 28% of Kenya’s Gross
Domestic Product. However majority of SMEs in Kenya do not get to
celebrate their third anniversary because 46% collapse within their
first year while approximately 400,000 die within their 2nd anniversary. Source (Kenya National Bureau of Statistics).
The partnership between NIC Bank and AGF is therefore a strategic
move that will enable SME customers seeking Trade Financing, overcome
the financing barrier. The loan portfolio guarantee facility will see
AGF share the risks envisioned by the bank in situations where the
target SME clients are unable to meet collateral threshold requirements.
AGF Group Deputy Chief Executive Officer, Mr. Jules Ngankam while
speaking during the signing ceremony said: “With this partnership, we
are going to increase access to finance for more SMEs. This will mean
more job creation and revenue generation which directly aligns with
AGF’s mission of catalyzing economic growth and poverty reduction in
Africa. AGF is proud to have partnered with a bank that has a vision for
SMEs and believes in their potential to spur the growth of this
Speaking at the signing ceremony, Mr. Ellie Chiuri the Corporate
Director at NIC Bank reaffirmed the banks position in striving to be the
leader in offering financing solutions backed by uniquely competent
trade and relationship management experts, wide correspondent banking
network and a unique ability to handle risk management.
“We support our Trade Finance customers with innovative products and
services and specialist expertise in sectors like Agribusiness,
Manufacturing, Trading, Health, Transport and Communication, Energy,
Government and Education. We customize our products and services to meet
our clients’ specific account management, payments, collections and
liquidity management requirements.”
Sally Chege, the Transactional Banking Deputy Director at NIC Bank
also mentioned that the goal of this partnership is centered on
supporting the growth of SMEs in their day-to-day financial management
needs. The value proposition is to continue offering tailor-made
services to our customers and take advantage of our local and regional
market and business expertise.
At the same time, Mr. Stephen Gakuya, the Head of SME at NIC Bank
reiterated that the partnership between AGF and NIC Bank is a strategic
move aimed at unlocking opportunities to spur growth for SMEs.
“We are certain that this partnership will empower SME growth and
increase job creation in the country. NIC Bank has a solid track record
of promoting SMEs in Kenya and the markets we operate in and therefore
with this partnership we are going to increase the number of SMEs we
finance and also pay special focus to the youth entrepreneurs, among
others to facilitate their growth and in turn the growth of our economy.
Customers taking this offer will be expected to visit any NIC Bank
branch or get in touch with their respective Relationship Managers to be
guided on the requirements.