Chase Bank has secured KShs 5 billion (about $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 Chief Executive Officer, says 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,” says 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,” says 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 adds 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,” says 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,” says 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.”