The African Development Bank and Commercial Bank of Africa Limited (“CBA”) last week signed a US $90-million financial package, aimed at supporting SMEs and local corporates in infrastructure, tradable and other transformative sector transactions in Kenya.
The package comprises of a US $50-million Line of Credit and US $40-million Trade Finance Line of Credit, and will provide liquidity support to expand financing to small and medium enterprises (SMEs) and local corporates involved in value-addition in the trading, manufacturing, agriculture, infrastructure, transport, and construction, among other sectors. In so doing, it will enhance job creation and facilitating financial access to businesses.
AfDB was represented by the Director-General for East Africa Mr. Gabriel Negatu, while CBA was represented by the Group Managing Director, Mr. Isaac Awuondo, at the signing ceremony at African Development Bank offices in Nairobi.
This line of credit will augment CBA’s efforts in broadening access to its services, thus reducing financing constraints faced by SMEs and local corporates in Kenya whilst also reducing Africa’s trade financing gap. The intervention will promote private sector development and support broad-based economic growth. The funding will also contribute to CBA’s endeavours to complement the efforts of the Government of Kenya’s Long Term Development Strategic Agenda Vision 2030, which seeks to revitalize the economy by improving access to affordable credit for SMEs, thus supporting the economic transformation of Kenya’s economy to make it more resilient and diversified.
“While SME’s provide employment to more than 80% of the population in Kenya, and account for a majority of new jobs created every year, it is unfortunate that the financial sector in Kenya has to a large extent been able to meet their financing gap for growth. The bold step that we have taken through our willingness to work with SME’s illustrates the potential we see in SME’s and their role in sustaining Kenya’s economic growth,” said Mr. Awoundo.
This intervention is also well aligned with AfDB’s Ten Year Strategy 2013-2022, as well as the Bank’s High 5 strategic priorities, including Industrialize Africa, Integrate Africa, Feed Africa and Improve the quality of life for the people of Africa. It will help to increase enterprise development and competitiveness through expansion of the economic base. This will be made possible by enhancing access to financial services and expanding access to social and economic infrastructure, which will thus contribute to inclusive growth.
Mr. Negatu added, “We are proud to partner with the CBA Group, a well-established bank in the region, and the largest bank in Kenya, by customer numbers. Like CBA we believe that Africa’s economic growth cannot reach its optimum if we do not support the SME’s, who play an integral part in ensuring that goods and services reach a majority of the population.”
