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Nairobi Business Monthly
Home»Briefing»NIC Bank enters agreement with AGF
Briefing

NIC Bank enters agreement with AGF

NBM CORRESPONDENTBy NBM CORRESPONDENT4th June 2019Updated:23rd September 2019No Comments2 Mins Read
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NIC Bank Kenya has signed a loan portfolio guarantee agreement with the African Guarantee Fund (AGF) for the benefit of small and medium sized enterprises (SMEs) in Kenya. The loan is to be used for the promotion and development of SMEs seeking trade financing in the country.

The agreement which amounts to Sh516 million is meant to increase economic growth by improving access to finance for small businesses in the nation, which has reduced ever since the signing into law of the interest rate cap. The small enterprises employ about 80% of the working population and contribute 28% to the GDP.

According to Jules Ngankam, CEO of African Guarantee Fund, the agreement with NIC bank is to offer partial credit guarantee and improve the bank’s capacity to finance SMEs.

The Nairobi Law Monthly September Edition

“With this partnership, we are going to increase access to finance for 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 country,” he said.

On the other hand, Ellie Chiuri, NIC’s corporate director reaffirmed the lender’s 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,” said Mr Chiuri.

Businesses have been suffering when it comes to securing funding for their operations and since the interest rate cap, things have only gotten worse. According to the Kenya National Bureau of Statistics, in 2016, up to 400,000 small businesses shut down within the first two years of running and 2.2 million enterprises closed within five years of running mainly due to cash flow problems.

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The Nairobi Law Monthly September Edition
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