Latest round of financing to spur Chase Bank's credit expansion to SMEs as it plans KShs60 billion for sector in the next three years.
Chase Bank has secured KShs 5 billion (USD 50 million) on-lending facility from the African Development Bank (AfDB) to support its growth strategy.
The facility has already been approved by AfDB's Board and will further strengthen the bank's intervention in the SME sector. Paul Njaga, Chase Bank's Chief Executive Officer, said that through the new lending facility, the bank will be playing a critical part in addressing income inequalities by on-lending to sectors that have historically been locked out of the credit market.
"SMEs are the engine of growth of Kenya's economy in terms of employment creation and income generation. For the sector to grow sustainably, barriers to access financing will need to be addressed. We are therefore delighted by the partnership we have established with the AfDB to support clients in this business segment that have traditionally been under-served. This facility will also enable Chase Bank pursue one of its key mandates of achieving financial inclusivity," said Njaga. He was speaking during the signing of the agreement with Gabriel Negatu, AfDB's Regional Director, Eastern Africa.
"By partnering with Chase Bank, the AfDB complements its existing initiatives to support SMEs in Africa as well as the development of private sector and financial markets on the continent. As one of its priority objectives, the AfDB supports investments that contribute to inclusive growth on the continent. We are pleased to have this opportunity to work with Chase Bank which will help to contribute towards financial intermediation by promoting SMEs' access to risk capital as well as enhancing the capacity of entrepreneurs in Kenya and Africa in general. This is a key priority area of the AfDB," said Negatu
The new facility will be lent across key sectors of the Kenyan economy including business services, building and construction, retail, transport, communications, manufacturing and the hospitality industry. Njaga added that the funding would go a long way in fulfilling the Bank's commitment to set aside KShs 60 billion for SMEs financing over the next three years.
"At Chase Bank, the roll out of alternative banking channels explains why we are so big on creating positive impact in our society. This facility will give us a stronger foothold in our key areas of intervention," said Njaga.
"AfDB has been active in supporting financial sector lending across the continent, with a special emphasis on institutions that have a large reach and impact," said Negatu. "AfDB is actively engaging with and recruiting potential commercial bank partners, such as Chase Bank, that are focused and capable of not only delivering good commercial results but also demonstrable development impact."
About the AfDB
AfDB is an international financial institution and multilateral development bank established to contribute to the economic development and social progress of African countries. Its mission is to fight poverty and improve living conditions through promoting the investment of public and private capital in projects and programs that contribute to the economic and social development in Africa. www.afdb.org
About Chase Bank
Chase Bank, is a leading commercial bank in the SME financial service space in Kenya and has over the years engaged strategic institutional investors to support its socially inclusive growth plans. In the recent past, the bank has engaged key partnerships with a similar focus to support sustainable development for SME's and individual households with global institutions including AATIF to support its Agri-banking unit, International Finance Corporation (IFC) to enable women in business, Agence Française de Développement (AFD) and Global Climate Partnership Fund (GCPF) to support Small-scale green energy generating businesses.
