Mid-tier lender Sidian Bank has secured Sh515 million from African Guarantee Fund (AGF) targeting Small and Medium Enterprises (SMEs).
Sidian Bank chief executive Chege Thumbi revelaved that the four-year deal seeks to support the growth of SMEs through provision of guarantees for the bank’s customer loan facilities.
“The AGF loan portfolio guarantee will enable us to scale up our lending activities to small and medium sized enterprises through provision of credit facilities,” he said.
Thumbi said the lender was proud to be partnering with an institution that has a similar interest in SMEs, having been on the frontline across the country through a number of instruments that seek to provide accessibility to finance.
“We are excited to partner with AGF in this Loan Portfolio Guarantee Facility. 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 Group CEO Jules Ngankam said the partnership comes at the right time since it will enable the bank to provide more financial solutions to SMEs especially in view of the impact of the pandemic on SME businesses.
One of the challenges many SMEs face in accessing credit, is lack of adequate collateral to support their borrowingm he saaid.
By tackling the financing gap, SMEs will be able to increase sustainable growth making the sector a source of employment, skills and wealth creation.
“Our objective is to support SMEs, to play their role of engine drivers of growth. Once we bridge the financial gap this serves to reduce poverty throughout the continent,”said Ngankam.
African Guarantee Fund is a non-bank financial institution whose objective is to promote economic development, increase employment and reduce poverty in Africa by providing financial institutions with guarantee products and capacity development assistance specifically intended to support SMEs in Africa.