Nairobi — The Kenya Development Corporation (KDC) has advanced a credit facility worth Sh300 million to a Muranga-based savings and credit cooperative society, Amica Savings and Credit Ltd, for onwards lending to consumers.
Amica Chief Executive Officer James Mbui said that the loan facility will reinforce the Sacco's ability to empower local businesses, particularly in agriculture, trade, and manufacturing.
"This loan facility will go a long way in meeting our strategic plan of creating an institutional culture of excellence even as we aim to realize and hopefully surpass our Sh1.2 Billion revenue target for the year," said Mbui.
Under the plan, the state-owned development finance institution, KDC, has set its loan repayment period of 10 years--a first for a local Sacco under KDC's Supporting Access to Finance and Enterprise Recovery (SAFER) Project.
SAFER is an initiative backed by the World Bank with KDC as the implementer of the Sh8 billion funding meant to support significant financial challenges faced by micro, small, and medium enterprises (MSMEs) in Kenya, particularly in the wake of the COVID-19 pandemic.
It covers liquidity support to SMEs, de-risking lending through bolstering the national credit guarantee, and providing technical assistance and project management to participating financial institutions (PFIs), including regulated SACCOs, microfinance banks, and commercial banks.
"The KES 300 million facility is a pivotal investment in Murang'a County's future. It will enable Amica Sacco to provide crucial support to local businesses as they recover and expand, spark economic activity, and drive overall community prosperity," said KDC's Director-General Norah Ratemo during the cheque's presentation in Murang'a.
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She further noted that the pandemic exacerbated pre-existing market failures, severely limiting MSMEs' access to vital credit needed to sustain and grow their businesses.
The project spans 25 years, with the first five years dedicated to implementation, and is structured into three interrelated components that focus on liquidity support, de-risking lending, and providing technical assistance.
KDC said it has received a total of 41 applications worth Sh15 billion in loan requests from various entities, signalling an ever-increasing demand for loans in the wake of a wobbly economy and unpredictable tax policies. It said about 4 counties have since benefitted from its credit facilities.
